Natural Gas Price Fundamental Daily Forecast – Specs Betting on Increasing Heat Dome Demand July 10-13

Natural gas futures are edging higher for a fourth session early Wednesday as weaker shorts continued to cover positions and a few speculators went long on expectations of a jump in cooling demand.

Prompting the move are overnight runs of the American and European weather models that maintained hotter trends from runs earlier in the week, according to Natural Gas Intelligence (NGI). The data continues to show “numerous Bcf” in added demand, according to NatGasWeather.

At 13:49 GMT, August natural gas futures are trading $6.742, up 0.172 or +2.62%. The United States Natural Gas Fund is at $22.93, up $0.28 or +1.24%.

NatGasWeather Near-Term Outlook

“The pattern for next week is forecast to remain hot over most of the southern two-thirds of the U.S. with highs of 90s to lower 100s,” NatGasWeather said.

“The overnight data maintained a hot U.S. pattern continuing July 10-13, although it does shift the hottest portion of the heat dome over the west-central U.S., thereby allowing a little stronger cooling over the Great Lakes and Northeast.”

Maxar Predicts Heat

NGI reported that Maxar’s Weather Desk similarly forecast above-normal temperatures from the western to central Lower 48 during the 11-15 day period, from July 9-13.

Refinitiv Supply/Demand Forecast

Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 95.1 billion cubic feet per day (bcfd) so far in June from 95.2 bcfd in May. That compares with a monthly record of December 2021.

On a daily basis, output was on track to drop 2.1 bcfd over the past four days to a preliminary two-week low of 94.0 bcfd on Wednesday after hitting a six-month high of 96.1 bcfd on Saturday.

With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 94.2 bcfd this week to 95.5 bcfd next week. The forecast for next week was lower than Refinitiv’s outlook on Tuesday.

Daily Forecast

Technically speaking, the main trend is down according to the daily swing chart. A trade through $6.062 will signal a resumption of the downtrend. A move through $9.645 will change the main trend to up.

The minor trend is also down. A trade through $6.950 will change the minor trend to up. This will shift momentum to the upside.

The major support is the retracement zone at $6.587 to $5.865. It stopped the selling at $6.062 on June 24.

The first upside target is a minor 50% level at $7.022. This is a potential trigger point for an acceleration to the upside with targets layered at $7.612 – $8.276.