Natural Gas Price Fundamental Daily Forecast – Needs to Clear $3.224 to Extend the Rally

U.S. natural gas prices rallied early in the session on Tuesday, but the market ran into a wave of selling pressure as it approached a key technical retracement zone at $3.224 to $3.303. This is the zone that will ultimately determine the longer-term direction of the market.

November natural gas settled at $3.174, down $0.021 or -0.66%.

Forecast

Tuesday’s technical closing price reversal chart pattern strongly suggests that the selling is greater than the buying at current price levels. It does not mean the trend is getting ready to turn lower. It could actually mean that investors are not interested in buying strength at this time, but may prefer to buy breaks for the next wave higher. They may be waiting for news to confirm the current bullish tone.

At this time, investors are dealing with bullish weather forecasts, tropical storm activity in the Atlantic and the weekly storage report.

According to natgasweather.com from September 19 to September 25, “High pressure will dominate the southern and east-central U.S. through early next week with highs of 80s and 90s.”

“Much of the West will be cool, aided by a rather chilly fall-like weather system arriving this weekend with valley rains and mountain snows.”

Tropical system Jose is expected to provide a glancing blow of showers and cooling mid-week to the NE Coast.”

“Overall, national natural gas demand will be moderate to high through next week.”

Additionally, on Tuesday, Hurricane Maria reached impressive strength and is now a Category 5 storm with winds over 150 mph. The track is expected to take it over Puerto Rico late today and tonight and then will turn north. This storm could impact Florida or the U.S. east coast. If it hits Florida then natural gas demand could be affected.

Looking ahead to Thursday’s U.S. Energy Information Administration’s weekly storage report, investors should expect a build of about 87 billion cubic feet in the week-ended September 15.

If buyers decide to buy strength then the volume is going to have to be strong enough to take out the major retracement zone at $3.224 to $3.303 in order to extend the rally.

The new short-term range is $2.957 to $3.214. If the selling pressure continues then look for a pullback into its retracement zone at $3.086 to $3.055. Since the trend is up, buyers could show up to defend the trend on a pullback into this zone.

The next move in natural gas will be determined by momentum probably tied to the news. Bullish news could create enough upside momentum to challenge $3.224 to $3.303. Bearish news will likely drive