Natural Gas Price Fundamental Daily Forecast – In Position to Test Major Retracement Zone at $3.224 to $3.303

Natural gas futures surged to their highest level in more than three months on Monday on expectations of more demand than previously forecast through the end of September.

Thompson Reuters is now projecting that U.S. gas consumption will rise to 72.2 billion cubic feet per day this week, up from the 71.8 bcfd forecast last week.

For the last week of September, analysts are saying that demand would average 71.1 bcfd, up from the 69.9 bcfd forecast last week. Natural gas use over the next two weeks was up 67.7 bcfd seen last week when Hurricane Irma knocked out power to millions in the U.S. Southeast and brought cooler, wetter weather to much of the eastern half of the country.

According to natgasweather.com, “High pressure will dominate the southern and east-central U.S. with highs of 80s and 90s.”

“Overall, stronger than normal demand with east of the Rockies being quite warm. Overall, national natural gas demand will be moderate-high through next week.”

Forecast

This week’s U.S. Energy Information Administration’s weekly storage report is expected to show utilities added a bigger-than-usual 87 billion cubic feet of gas into storage during the week-ended September 15, which would boost inventories to more than 2 percent above normal for this time of year.

That compared with 54 bcf increase during the same week a year ago and a five-year average rise of 73 bcf for that period.

The price action on the charts is impressive. The main trend is up on the daily chart with the November futures contract in a position to challenge a major technical retracement zone at $3.224 to $3.303. Trader reaction to this zone will set the longer-term tone of the market.