Natural Gas Price Fundamental Daily Forecast – Today’s EIA Report Should Show Largest Draw of Season

Natural gas futures are under pressure on Thursday, ahead of the weekly U.S. Energy Information Administration storage report. The price action indicates short-sellers are still in control and that they have no concerns over the weather or storage issues. The issue at this time is bearish demand due to unseasonably mild conditions.

At 14:00 GMT, March Natural Gas is trading $2.622, down $0.040 or -1.50%.

Short-Term Weather Outlook

According to NatGasWeather for February 7 to February 13, “Cold air over the Plains will spread into Texas and across the Midwest today and Friday with a wintery mess of precipitation. Temperatures behind the core of the cold front will drop into the -10s to 20s, but also with teens to 30s into Texas and the South. It will be mild for one more day over the East with highs of 50s to 80s, although rapidly cooling Friday-Saturday as the Midwest front arrives. The West will be unsettled and cool to cold. A mild break will return across the southern and eastern U.S. early next week before another cold front arrives late in the week. Overall, national demand will be low through Thursday then increasing to high Friday-Sunday.”

U.S. Energy Information Administration Weekly Storage Report

Today’s EIA report is likely to show the largest storage withdrawal of the winter. Bloomberg is predicting a withdrawal range of 222 Bcf to 253 Bcf, with a median of 247 Bcf. Bespoke Weather Services projects a 253 Bcf withdrawal. EBW expects to see a 245 Bcf draw. Reuters is looking for a withdrawal of 228 Bcf.

Forecast

At this point, the chances of a strong winter rally are extremely low. If the EIA reports a large drawdown then don’t be surprised by a short-covering rally, however. They may use this report as an excuse to book profits.

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