Natural Gas Price Fundamental Daily Forecast – Return of Cooler Weather Could Boost Demand

Natural gas futures are trading higher early in the session on Monday. Prices gapped higher then quickly retreated. Over the short-term investors are going to be watching the weather forecasts, but longer-term investors are going to be reacting to reports of lower production and rising exports.

July Natural Gas futures are trading $3.385, up $0.032 or +0.95%. The market opened at its high at $3.393 before falling slightly.

According to natgasfutures.com, from May 22 to May 28, “A cool front with showers and thunderstorms will track through the southern and eastern U.S. the next few days, dropping temperatures slightly below normal.”

“A reinforcing cool shot will follow across the northern, central, and eastern U.S. late this week before warming next weekend.”

“The West, including the SW and Texas, will be mostly warm to hot with highs of 80s and 90s.”

“Overall, natural gas demand will remain slightly stronger than normal.”

It looks as if temperatures are following the normal spring pattern, sometimes warm, sometimes cool. If this continues than prices are likely to remain rangebound until the summer heat returns.

The short-term range is $3.506 to $3.256. Its 50% to 61.8% retracement zone is $3.368 to $3.335. If temperatures hold steady then we’re likely to see a two-sided trade on both sides of this zone.

We could see an upside bias develop on a sustained move over $3.368 and a downside bias on a sustained move under $3.335.

If volatility increases, then $3.506 will become the near-term upside target. And, $3.197 will become the major downside target.