Natural Gas Price Fundamental Daily Forecast – Looking for Bullish News to Trigger Breakout over $1.881

Natural gas futures are trading lower on Wednesday shortly before the regular session opening. The early weakness takes away some of the shine following yesterday’s technical reversal to the upside.

On Tuesday, the market hit a new contract low before rebounding and closing higher on the back of tight supply/demand balances and forecasts calling for temperatures to return to near-normal levels by the middle of the month.

At 12:27 GMT, March natural gas futures are trading $1.846, down $0.026 or -1.39%.

Natural Gas Intelligence reported, citing NatGasWeather, “There’s still plenty of mild weather ahead over the next couple of weeks, but the latest Global Forecast System model turned colder at the end of the run, likely providing some support to a market that has continued to sink to multi-year lows in recent weeks. The model added 7 heating degree days (HDD) compared to the overnight run, but continued to stall the arrival of cold air into the Great Lakes and Northeast by another day and not until February 16-19.”

“What could be most important is it does not show the set-up to be rather cold February 18-19, just a day later,” the forecaster said. With prices closing near session highs, it appears the market was satisfied in the weather data, “or they view the balance as tight enough regardless of weather.”

EIA Report

An early look at this week’s U.S. Energy Information Administration’s (EIA) Weekly Storage report on Thursday shows traders are looking for a 123 billion cubic feet drawdown (Bcf).

Daily Forecast

The market is likely being underpinned by reports of tight supply/demand. The technical closing price reversal bottom is potentially bullish. So why no rally? The weather of course.

On the daily chart, overcoming $1.881 convincingly could trigger a sharp rise into the price gap at $1.963 to $1.977. However, this isn’t going to happen unless the weather shifts toward cold enough to spook a few of the weaker short-sellers out of the market.