Natural Gas Price Fundamental Daily Forecast – Prices Hovering Around December 21 Bottom at $2.532

Natural gas prices continued to slide on Monday with some charts showing gas prices at their lowest levels in nearly two years. Short-sellers continue to bet that the winter heating season will end on a bearish note as weather forecasts continue to point toward milder temperatures heading into March.

March Natural Gas futures settled at $2.552, down $0.032 or -1.24%.

Forecast

According to natgasweather.com and other weather services, futures are likely to remain under pressure and rallies are likely to be capped as weather conditions improve.

Looking ahead to this week’s U.S. Energy Information Administration’s weekly storage report, traders expect to see a draw of about 180 billion cubic feet (bcf) in the week ended February 9.

That compares with a decline of 119 bcf in the preceding week, a fall of 114 bcf a year earlier and a five-year average drop of 154 bcf.

Total natural gas in storage currently stands at 2.078 trillion cubic feet (tcf), according to the EIA.

That figure is 503 bcf, or around 19.4%, lower than levels at this time a year ago and 393 bcf, or roughly 15.9%, below the five-year average for this time of year.

The market futures contract hit $2.538 on Monday, just slightly above the December 21 main bottom at $2.532.

Early Tuesday, natural gas is trading higher. There were no changes in the weather or other fundamentals so the price action is likely related to profit-taking or position-squaring ahead of this week’s EIA report.

If the rally does gain traction, there is the remote possibility of a rally back to a major retracement zone at $2.899 to $2.984 over the near-term. However, it is going to take a combination of a shift in the weather and a surprise in the EIA report to drive prices into this area.