Natural Gas Price Fundamental Daily Forecast – Main Trend Down, but Momentum is Trending Higher

Natural gas futures settled only slightly higher on Friday despite strong U.S. export levels, signs of stronger Gulf Coast Industrial demand and worries over supply because of a ship blocking traffic in the Suez Canal.

On Friday, May natural gas settled at $2.619, up $0.003 or +0.11%.

Demand for LNG Remains Strong

According to Natural Gas Intelligence (NGI), demand for U.S. liquefied natural gas (LNG) held strong Friday, as it has for most of this month amid dwindling supplies and increasing need for imports in Europe. LNG feed gas volumes approached 11.6 Bcf on Friday, according to NGI data. Volumes held above the 11 Bcf threshold all week, as they have over a majority of days in March.

This has helped to offset modest weather-driven demand domestically, as the lower 48 segues into the spring season, when heating needs fade and most Americans only begin to run air conditioners amid mild temperatures.

Energy Information Administration Weekly Storage Report

The EIA reported a withdrawal of 36 Bcf from natural gas storage for the week ended March 19, a pull that was steeper than market expectations and the year earlier draw of 26 Bcf.

Ahead of the report, NGI reported estimates clustered around the low to mid-20s.

NGI modeled a 17 Bcf withdrawal. The median of a Bloomberg survey showed a withdrawal of 21 Bcf, with responses ranging from draws of 14 Bcf to 33 Bcf.

Reuters’ weekly poll found pull estimates from 16 Bcf to 41 Bcf, with a median decrease of 25 Bcf. Respondents to a Wall Street Journal survey reported withdrawal estimates that spanned 14 Bcf to 33 Bcf and averaged 26 Bcf.

Short Term Outlook

The main trend is down, but momentum has shifted to the upside. A trade through $2.750 will change the main trend to up. A move through $2.459 will signal a resumption of the downtrend.

The main range is $2.352 to $3.060. The market is currently testing the lower level of its retracement zone at $2.706 to $2.622. This zone is controlling the near-term direction of the market.

Look for a strong bullish tone to develop on a sustained move over $2.706 and for the bearish tone to continue on a sustained move under $2.622.

Holding inside $2.622 to $2.706 will indicate a neutral market.

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