Natural Gas Price Fundamental Daily Forecast – Return of Cold Temps Could Drive Prices to $2.774

Natural gas futures settled higher on weather concerns as another wave of cold temperatures swept through key demand areas in the Midwest and East Coast. Since the weather pattern is expected to be short-lived, gains were limited.

April Natural Gas futures settled at $2.704, up $0.009 or +0.33%.

According to NatGasWeather.com for March 6 to March 11, “A weather system coming out of the West will bring rain and snow to the Plains the next few days, then tracking into the East for the second half of the week. This will bring an increase in national demand to high after being light to open the week. Demand overall will be moderate to high over the next week.

Forecast

Buyers continue to support natural gas prices early Tuesday. At 0701 GMT, April Natural Gas prices are trading $2.713, up $0.009 or +0.33%.

Prices are probably being supported by a strong weather system and associated cold shot that is expected to push through Wednesday to Saturday for stronger than normal demand. According to the weather maps, it is not an exceptionally frigid system, but will still result in stronger than normal national heating demand.

Early guesses show that this week’s EIA storage report should show a draw of 70 Bcf. Last year’s report for the same time period came in at -57 Bcf. The five-year average is 129 Bcf.

The daily chart pattern is signaling that the key support is a 50% level or pivot at $2.648. The market should continue to show an upside bias as long as this level holds as support.

The main range is $2.983 to $2.565. If the upside momentum is strong enough to overcome last week’s high at $2.731 then look for the rally to extend into the main retracement zone at $2.774 to $2.823.