Natural Gas Price Fundamental Daily Forecast – Latest Forecasts Offer Little Comfort for Bulls

Natural gas futures are edging lower on Tuesday after a sell-off at the start of the week was fueled by forecasts for more seasonal weather, lowering demand expectations into early December. According to Natural Gas Intelligence (NGI), seasonal temperatures also drove spot market prices lower for most of the country, although big gains in California proved a notable exception; NGI’s Spot Gas National Average fell 10.5 cents to $2.415.

At 13:05 GMT, January natural gas futures are trading $2.607, down 0.023 or -0.84%.

Short-Term Weather Outlook

According to NatGasWeather for November 19 to November 25, “Three separate weather systems will impact the northern US today but none very cold. One will exit the Northeast, a second will track across the Great Lakes, and a third will push into the West. While slightly cool, these systems will still have highs of upper 30s to 50s. The rest of the US will be mild to warm with highs of 60s & 70s, warmest over Texas as high pressure sets up over the central US, then shifts over the South and East Wednesday through Friday. A fresh cold shot will push into the central US Thursday, then into the East Friday through Saturday with lows of 20s to 30s. Overall, light national demand this week, increasing slightly this weekend on Eastern US cooling. Overall, national demand will be moderate through Friday, then high this coming weekend.”

Mid-Term Weather Outlook

“The Global Forecast System (GFS) data advertised a slightly warmer outlook for early next week and a “quite seasonal pattern” for November 29 to December 2; shots of cooler – but not particularly cold – temperatures were expected for northern portions of the country during this period,” according to NatGasWeather.

“Data later Monday from the European Model came in ‘much milder trending’ for next week and for early December dropping another 9 heating degree days (HDD) from the outlook after losing 8 HDDs overnight,” the forecaster said.

Early Look at This Week’s EIA Report

The Desk’s Early View storage survey Friday showed 20 respondents predicting a median 89 Bcf withdrawal for the week ended November 15, with expectations ranging from a withdrawal of 65 Bcf up to a 102 Bcf pull.

Daily Forecast

The market is bearish because, “Seasonal weather systems will not be cold enough this year as they need to be much colder than normal to overcome very strong production,” NatGasWeather said.

Furthermore, “With no significant cold anomalies in the forecast, we expect the year/year storage surplus to grow by 70 Bcf over the next three weeks, pushing natural gas prices significantly lower,” according to EBW Analytics Group.