Natural Gas Price Fundamental Daily Forecast – Getting Weaker; New Resistance $3.111 to $3.151

Natural gas futures plunged to a three-week low on Wednesday after the release of a U.S. Energy Information Administration storage report.

January Natural Gas futures settled at $3.059, down $0.051 or -1.64%.

According to the EIA, domestic supplies of natural gas fell by 46 billion cubic feet for the week-ended November 17. The report was released a day early because of Thursday’s Thanksgiving holiday.

According to forecasts, investors were looking for a decrease of 54 billion.

Total stocks now stand at 3.726 trillion cubic feet, down 319 billion cubic feet from a year ago, and 121 billion cubic feet below the five-year average, the government said.

Forecast

The futures market is trade today. When trading resumes on Friday, traders will be looking at a weak market.

According to natgasweather.com for the period November 23 to November 28, “A fresh cold shot will impact the Midwest and Northeast on Thursday with lows behind the cold front dropping into the teens to lower 30s, with highs only in the 30s and 40s.

The western and southern U.S. will be mild to warm with highs of 60s to 80s due to high pressure dominating, apart from the cool and wet Northwest.

A brief milder break will spread across the east-central U.S. late Friday and Saturday ahead of another cool shot arriving Sunday to Tuesday.

Demand will be moderate to high.

January Natural Gas futures are trading well below the key retracement zone at $3.151 to $3.111. This has put the market in a weak position. This area is new resistance.

Barring a periodic short-covering rally due to oversold conditions, I don’t expect to see a meaningful rally until the U.S. gets hit by extremely cold temperatures that last at least a week to 10 days.