Natural Gas Price Fundamental Daily Forecast – Short-covering Rally Could Drive Prices into $2.181 to $2.217

Natural gas futures are trading unchanged shortly after the regular session opening. The lack of fresh information from over the weekend is helping to hold the market inside Friday’s range, which tends to indicate investor indecision and impending volatility.

Helping to hold prices in a tight range are forecasts showing building heat in long-range weather forecasts, last week’s surprisingly large drop in feed gas deliveries to liquefied natural gas (LNG) facilities, an above-average storage injection and record production. One of these factors has to change in order to get some movement in the market.

At 13:04 GMT, September natural gas futures are trading $2.135, up $0.016 or +0.71%.

Furthermore, traders are still trying figure out if we’re looking at accumulation or distribution at current price levels.

Short-term Weather Outlook

According to NatGasWeather for August 12 to August 18, “Strong high pressure will rule the southern US with highs of 90s to 100s, hottest over the Southwest & Texas for strong demand. A strong weekend cool front is exiting the Midwest and Northeast with temperatures warming Monday into the mid to upper 80s from Chicago to New York City, although cooling back off mid-week as weather systems return across the northern US with highs of only 70s and 80s. Overall, strong demand over the southern US but only light to moderate demand across the northern US after Monday. Overall, demand will be moderate to low across the northern US and high across the southern US, but not quite strong enough overall.”

Daily Forecast

Traders could lean to the upside on Monday because of warmer forecast trends. However, the move is not likely to last. Prices could firm again later in the week if the heat begins to expand into the Midwest and East.

The daily chart shows the main trend is down. The main range is $2.333 to $2.029. Its retracement zone at $2.181 to $2.217 is the next potential upside target. Since the trend is down, sellers could return on a test of this zone.

Watch the price action at $2.181 to $2.217 all week. Trader reaction to this zone will determine if the bears are still in control, or if aggressive counter-trend buyers are taking over.