Natural Gas Price Fundamental Daily Forecast – Likely Range Bound Until Thursday’s EIA Storage Report

Natural gas prices posted a dramatic outside move on Monday before finishing lower for the session. The price action seemed to indicate that investors were reacting to the current two-sided weather forecast.

November natural gas futures settled at $2.988, down $0.033 or -1.09%.

The warm weather lingering over the Midwest and moving towards the East is helping to increase demand for air-conditioning. This may have been behind the early rally. The news that this pattern is expected to end by mid-week, followed by cooling late in the week may have been the catalyst behind the selling pressure.

According to the U.S. Energy Information Administration, total natural gas in storage currently stands at 3.408 trillion cubic feet. This is around 3.8% lower than levels at this time a year ago and in line with the five-year average for this time of year.

Forecast

The chart pattern is still suggesting the possibility of a rangebound trade. The retracement zone at $3.055 to $3.086 is currently resistance. The support is a pair of main bottoms at $2.957 and $2.954.

Prices may sit in a range until Thursday when the EIA releases its latest storage data for the week-ending September 22. This may be the first report to come in near average for this time of year since Hurricane Harvey hit the Texas Gulf Coast region the last week of August.

Traders are forecasting the storage report will show a build of about 66 billion cubic feet. That compares with a gain of 97 billion cubic feet in the preceding week, a build of 49 billion a year earlier and a five-year average rise of 84 billion cubic feet.

Natgasweather.com is predicting strong versus normal demand until Wednesday to Thursday, then easing to near normal/moderate.