Natural Gas Price Fundamental Daily Forecast – Trader Reaction to $2.841 Will Determine Direction Today

Natural gas is trading higher early Monday. The strength is being fueled by speculators betting the higher demand will slow down the amount of gas moving into storage. This could be a problem going into the summer cooling season because of the current supply deficit. Currently, national stocks sit at an estimated 1.432 Trillion Cubic Feet, a 26.6% deficit to the five-year average of 1.952 Tcf, according to the U.S. Energy Information Administration.

At 0919 GMT, July Natural Gas is trading $2.834, up $0.009 or +0.32%.

Forecast

The daily chart is also influencing the price action. The trend is down on the daily chart, but last week’s strong buying has put the market in a position to take out the late April top at $2.878. This move will change the main trend to up.

The main range is $2.680 to $2.919. Its 50% to 61.8% levels at 2.800 and $2.771 are providing support. Trading above this zone is helping to give the market an upside bias.

The short-term range is $2.919 to $2.714. Its retracement zone at $2.817 to $2.841 is currently being tested. Crossing over to the strong side of $2.841 will indicate the buying is getting stronger.

An early forecast from NatGasWeather.com says “Overall, demand will be low to locally moderate.”

Traders are saying that the EIA will report on Thursday a storage build of 105 Bcf for the week ending May 11.

Based on the early price action, the direction of the July Natural Gas market today is likely to be determined by trader reaction to $2.841.

Look for an upside bias to develop on a sustained move over $2.841. This could trigger an acceleration to the upside.

A downside bias will develop under $2.841, but the selling will be labored because of a pair of potential support levels at $2.817 and $2.800.