FXEMPIRE
All

Natural Gas Price Fundamental Daily Forecast – Price Action Suggests Traders May Have Found Comfortable Spot on Charts

This week’s price action suggests that traders have found a comfortable spot on the charts. The buyers are recognizing support at $2.747 to $2.737. The market is likely to remain rangebound over the near-term if supply/demand hold steady. The return of hot weather could trigger another upward spike in prices.
James Hyerczyk
Natural Gas Pipeline
Natural Gas Pipeline

Natural gas futures are trading slightly lower early Wednesday following a massive spike to the upside the previous session. The rally was fueled by a near-term rise in demand and a drop in production. This is something bullish traders have been hoping to see for weeks. The price action suggests the market may have found support, but gains are likely to be limited because of fluctuations in supply and demand over the near-term.

At 0917 GMT, November Natural Gas futures are trading $2.893, down $0.003 or -0.10%.

Demand Analysis

According to data from S&P Global Platts, total U.S. demand is set to climb to 80.9 Bcf Tuesday, after averaging 77.4 Bcf/d in the last seven days.

This level of demand is not expected to hold, however, as temperatures are expected to drop back to seasonal norms. Platts Analytics is saying that over the next seven days, demand is expected to drop back to an average 77 Bcf/d.

The combination of the current storage deficit with the drop in production also played a factor in Tuesday’s spike in prices. Current national gas inventories sit at 2.636 Tcf, 18.4% below the five-year average of 3.232 Tcf, according to data from the U.S. Energy Information Administration (EIA).

Supply Analysis

“U.S. dry gas production is estimated to drop 1.6 Bcf/d and stand at 82.4 Tuesday, after hitting a new record high of 84 Bcf the day prior”, according to data from Platts Analytics.

Forecast

This week’s price action suggests that traders have found a comfortable spot on the charts. The buyers are recognizing support at $2.747 to $2.737.

The main range is $3.013 to $2.747. Its 50% to 61.8% zone at $2.880 to $2.911 is the key balance area on the charts. The market is currently trading inside this zone. Trader reaction to this zone is likely to determine the near-term direction of the market.

Look for the rally to strengthen on a sustained move over $2.911. The next target over this level is a main top at $2.954.

A sustained move under $2.880 will indicate the presence of sellers. If this occurs then we could see a pullback into at least $2.823.

The market is likely to remain rangebound over the near-term if supply/demand hold steady. The return of hot weather could trigger another upward spike in prices.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US