Natural Gas Price Fundamental Daily Forecast – Trader Reaction to $3.151 to $3.111 Will Determine Direction Today

Natural gas futures fell sharply on Wednesday, but a successful test of a key technical 50% level at $3.151 stopped the selling, leading to a late session rebound. The price action wasn’t enough to turn the market higher for the session, but it did indicate buyer respect for the technical retracement area.

December natural gas settled at $3.179, down $0.024 or -0.75%.

Traders continue to focus on the near-term weather forecast. The models are currently split between warm and cold weather from November 24 to November 28. The lack of clarity is causing a rangebound, two-sided trade.

Forecast

Thursday’s U.S. Energy Information Administration’s weekly storage report is expected to show a draw of between 3 to 15 billion cubic feet (bcf) for an average of 9 in the week-ended November 10.

That compares with a gain of 15 bcf in the preceding week, a build of 30 bcf a year earlier and a five-year average rise of 12 bcf.

In other news, total natural gas in storage currently stands at 3.790 trillion cubic feet (tcf), according to the EIA. That figure is 219 bcf, or around 5.5%, lower than levels at this time a year ago and 71 bcf, or roughly 1.8%, below the five-year average for this time of year.

Watch the price action and order flow on a test of $3.151 to $3.111. Trader reaction to this zone will tell us if the buyers have returned, or if the selling pressure is increasing. Buyers are going to try to form a potentially bullish secondary higher bottom.