Natural Gas Price Fundamental Daily Forecast – Prices Could Recover after Hurricane Passes

Natural gas futures are recovering after early session weakest drove the market to its lowest level since May 19, 2016. Traders also appear to be taking a wait and see attitude after in Louisiana, Mississippi and Alabama, shut down operations ahead of Hurricane Nate which made landfall over the week-end.

It looks as if there was little damage to refinery infrastructure and most facilities was planning to reopen today.

At 0712 GMT, December Natural Gas futures are trading $3.054, up $0.008 or +0.26%.

In other news, U.S. natural gas speculators cut their net long positions for a second week in a row on less cold winter forecasts and an increase in production to record levels.

Speculators in four major New York Mercantile Exchange (NYMEX) and Intercontinental Exchange (ICE) markets reduced their bullish bets by 28,839 contracts to 225,886 in the week to October 3, the U.S. Commodity Futures Trading Commission said on Friday.

Forecast

The trading activity could be low on Monday due to the Columbus Day federal holiday in the United States although the futures markets are open.

Last week, the market lost ground even after a government report showed a smaller-than-expected storage build last week.

According to the U.S. Energy Information Administration (EIA), utilities added 42 billion cubic feet (bcf) of gas into storage in the week to September 29, leaving the total of fuel in inventories near the five-year average for this time of year at around 3.5 trillion cubic feet.

This week, according to natgasweather.com, “warm high pressure will dominate the southern and eastern U.S. through the weekend with highs of 70s and 80s. The West will be mild to warm with 70s to 80s, except 90s over the deserts.”

“A fresh cool blast will arrive over the north-central U.S. late this coming weekend into early next week, while mild to warm conditions hold over most of the rest of the country next week.”

“Overall, national demand will be low.”

Prices are expected to continue to drift sideways to lower over the near-term. The market is ripe for periodic short-covering rallies, but nothing is expected to stick until the weather turns cold.