Advertisement
Advertisement

Natural Gas Price Fundamental Daily Forecast – Heating Demand Estimated to Climb Over Next Seven Days

By:
James Hyerczyk
Published: Feb 18, 2019, 09:35 UTC

We’re looking for a bullish tone to develop on a sustained move over $2.648. The main trend is expected to change to up on a trade through $2.730.

Natural Gas

Natural gas is trading higher on Monday, following through to the upside after Friday’s strong reversal. Volume is on the light side and is expected to remain well-below average today due to a U.S. exchange holiday and early close.

Short-covering was the theme the previous session and it looks as if this theme is continuing early Monday. Buyers are likely reacting to the blast of cold air over the weekend in key demand areas and expectations of lingering cold throughout the week. Furthermore, the latest forecasts show more weather is coming late in the month.

At 09:21 GMT, April natural gas is trading $2.668, up $0.012 or +0.45%.

Short-Term Weather Outlook

According to NatGasWeather for February 15-21, “Mild conditions with highs of 40s and 50s will last for one more day across the East ahead of a cold front currently sweeping across the Midwest/Great Lakes where lows behind the front will drop into the -0s to 20s. The West will be cool to cold with areas of heavy rain and snow. The southern US will be warm with highs of 60s to 80s, although cooling Sunday-Tuesday with lows of teens to 30s. A stronger cold blast will push across the central and northern US Monday-Thursday with lows of -10s to 20s North and 20s to 40s over the South. Late next week, mild high pressure will build across the southern and eastern US with highs of 50s to 80s returning, warmest over the South/SE. Overall, national demand will increase to high-very high this weekend through much of next week.”

Mid-Term Weather Outlook

“The U.S. National Weather Service calls for lower-than-normal temperatures across much of the U.S. over the next two weeks, which may result in an upward push in heating demand and, in turn, some heavy drawdown from storage,” according to S&P Platts.

Weekly Storage Report

On Thursday, the U.S. Energy Information Administration reported that domestic supplies of natural gas fell by 78 billion cubic feet for the week ended February 8. That was pretty close to the consensus estimate of 80 Bcf. Total stocks now stand at 1.882 trillion cubic feet, down 30 billion cubic feet from a year ago and 333 billion below the five-year average, the government report showed.

Daily Forecast

The market is being supported because the GFS and European models are both in agreement on the return of cold temperatures.

“There may be some stronger withdrawals closer to or above the five-year average in the second half of February,” said Daniel Myers of Gelber & Associates, an energy advisory firm.

Platts is saying, “Heating demand is estimated to continue to climb over the next seven days to average 45.9 Bcf/d, the data showed. In the month so far, demand has averaged 45 Bcf/d, down about 700 MMcf from the same time period last year.”

We’re looking for a bullish tone to develop on a sustained move over $2.648. The main trend is expected to change to up on a trade through $2.730.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement