Natural Gas Price Fundamental Daily Forecast – Heat Will Be Supportive; Weak Feed Gas Flows Could Cap Gains

Natural gas futures are trading lower shortly after the cash market opening on Monday. Traders are reacting to forecasts calling for slightly cooler temperatures, according to Bespoke Weather Services.

At 13:34 GMT, August natural gas is trading $1.787, down $0.028 or -1.54%.

Weather Forecast Offers Little Support

Natural Gas Intelligence (NGI) reported that analysts at Bespoke said, “This week projects as “net cooler thanks to more influence from an upper level low stuck over the Mid-Atlantic and Southeast over the next few days, and also a little weaker warm surge late this week into the weekend once the upper level low move away.”

Bespoke further added, “We do see broad coverage of above normal temperatures late this month,” but they will be “more focused up north and out in the West as opposed to areas from Texas to the Southeast. “So while an above normal demand regime, it is not as optimal of a setup as it would be if the South was more involved.”

Demand Still a Concern

Bespoke observed “only marginal changes” in the latest data early Monday.

“We’ve still yet to recover any additional demand from the shut-downs, with industrial demand lagging,” Bespoke said. “We’d like to see this pick up to turn more bullish, though dips to $1.70 or lower could be bought.”

Daily Forecast

Prices are under pressure on Monday but could begin to firm later in the week as heat is expected to return.

Analysts at EBW said cash prices could remain soft Monday but should “strengthen significantly” later this week as hotter weather approaches.

“If feed gas flows can avoid further deterioration, prices could re-test last week’s highs by Friday,” the EBW team said. “If feed gas flows continue to drop, though, look out below!”

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