Natural Gas Price Fundamental Daily Forecast – Slight Upside Bias on Sustained Move Over $4.557

The short-term forecast is inconsistent enough to hold prices in a range, but the new forecast for January, calling for colder temperatures, could be what’s fueling the slight upside bias.
James Hyerczyk
Natural Gas
Natural Gas

Natural gas futures are trading higher on Wednesday for a second day after Monday’s steep break. Traders are trying to claw back to break-even for the week. The price action is actually a reflection of the concerns over the inconsistent weather forecasts and uncertainty ahead of this week’s U.S. Energy Information Administration’s weekly storage report.

At 1031 GMT, January Natural gas futures are trading $4.590, up 0.132 or +2.94%.

Concerns over the return of cold weather over the short-term is helping to support prices. However, the small changes in the forecast have been only enough to fuel a mildly bullish reaction. Strengthening spot gas prices in high demand areas are also helping to underpin the market.

The NatGasWeather forecasters are saying, “There haven’t been recent colder trends to justify today’s (Tuesday’s) move higher, just like there weren’t strong milder trends to justify yesterday’s (Monday’s) move lower.”

The weather service also made no changes to its short-term forecast. They are still saying that a series of cold shots was still on track to impact much of the country the rest of this week and into early next week for strong national demand. They also continued to say that mild high pressure was expected to follow, however, covering much of the northern and eastern United States December 12-17 and likely longer as the market waits on better potential for cold shots out of Canada to return to the northern United States.

The problem with the forecast is that the data still has revealed when the cold shots from Canada will arrive. “The longer it takes, the longer bearish weather sentiment will reign after the current series of cold blasts ends,” NatGasWeather said.

Additionally, helping to keep a lid on prices is bearish sentiment that is being generated by rising production data. According to Genscape, production has jumped more than 1 Bcf/d since last Monday (November 26). On Friday, the firm said production had topped the 87 Bcf/d mark.

Forecast

The short-term forecast is inconsistent enough to hold prices in a range, but the new forecast for January, calling for colder temperatures, could be what’s fueling the slight upside bias.

The chart pattern continues to indicate the presence of buyers on a sustained move over $4.557. A move under $4.431 will signal the return of sellers.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US