Natural Gas Price Fundamental Daily Forecast – Fundamentals Bearish; $3.012 Within Striking Distance

U.S. natural gas prices weakened for a third day on Thursday after weather forecasts pointed towards less heating demand over the next two weeks and record output. The weekly storage report didn’t help matters, coming in as expected.

December Natural Gas futures closed at $3.051, down $0.031 or -1.01%.

First the weather, Thompson Reuters is forecasting less natural gas will be used next week by homes and businesses. U.S. gas consumption is now projected to average 80.9 billion cubic feet per day next week, down from an earlier forecast of 81.5 bcfd.

Reuters also reported that production in the lower 48 U.S. states reached a record 75.1 bcfd on Tuesday and Wednesday, topping the prior high of 75.0 bcfd seen in September 2015.

On Thursday, the U.S. Energy Information Administration said utilities added a smaller-than-usual 64 billion cubic feet of gas into storage in the week to October 20, leaving the amount of fuel in stock about 1 percent below the five-year average for this time of year at around 37 trillion cubic feet.

That number compares with an increase of 74 bcf during the same week a year earlier and the five-year average build of 75 bcf for the period.

Finally, U.S. gas exports were expected to average 8.7 bcfd this week, up 71 percent from a year earlier, due primarily to rising shipments of liquefied natural gas, according to Reuters data.

Forecast

The daily chart pattern is bearish. Two consecutive closes under a key short-term technical retracement zone at $3.083 to $3.105 indicates a strong downside bias. The momentum created by the move puts the recent bottom at $3.012 easily within reach.

Buyers would have to overcome $3.105 to create any chance of a rally.

Looking ahead to next month, traders are saying that there should be more than enough gas to meet demand this winter if the latest forecasts for another warm winter are correct. According to the U.S. National Weather Service, temperatures in December, January and February are expected to be warmer than normal across much of the country again this year.