Natural Gas Price Fundamental Daily Forecast – Trader Reaction to Pivot at $2.716 Will Set the Tone Today

Thursday’s U.S. Energy Information Administration storage report is expected to show a draw of 68-71 Billion Cubic Feet (Bcf), according to S&P Global Platts. Another reliable service is calling for a draw of 75 Bcf. Both estimates would exceed the 46 Bcf five-year average and a 58 Bcf year-ago pull.
James Hyerczyk
Natural Gas
Natural Gas

Natural gas futures rallied early in the session on Wednesday before settling lower. Despite the weakness into the close, the market found support on a minor technical level.

May Natural Gas futures settled at $2.703, down $0.011 or -0.41%.

The market was supported by end-of-season storage expectations and mid-range weather outlooks, however, gains were limited by impending warmer weather. The latter market a stark contrast to earlier in the week reports calling for cooler temperatures into April.

According to NatGasWeather.com, “The pattern for the first week of April is rather cold across the northern U.S. with stronger than normal demand. However, by around April 10, the data favors the cold pool either retreating or moderating to more seasonal temperatures. This would result in light demand across the northern U.S. due to still somewhat cool overnight conditions. However, the southern half of the country would be rather comfortable with mostly 60s to 80s for very limited demand needs.”

Daily May Natural Gas

Forecast

Thursday’s U.S. Energy Information Administration storage report is expected to show a draw of 68-71 Billion Cubic Feet (Bcf), according to S&P Global Platts. Another reliable service is calling for a draw of 75 Bcf. Both estimates would exceed the 46 Bcf five-year average and a 58 Bcf year-ago pull.

Total working gas stocks are currently 1,446 Bcf, or 667 Bcf below the year-ago level.

We’re looking for lingering cold in early April, which should drive up heating demand. However, a warming trend during the second week in April should limit demand as warmer weather returns and production rises.

Based on the early price action, the resistance is $2.747 and the support is $2.688.

Look for a possible rally into $2.775 to $2.831 on a sustained rally over $2.747. The inability to overcome $2.747 will indicate the presence of sellers. This could trigger a break into $2.716 then $2.688.

Natural gas could accelerate to the downside if $2.688 fails as support.

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