Natural Gas Price Fundamental Daily Forecast – Trader Reaction to $3.306 Will Determine Today’s Direction

The long-term plan is to get long and stay long throughout the winter, however, there are going to be short-term swings due to changing weather patterns and strong production. In other words, don’t expect a prolonged rally unless there is a lingering cold spell. Furthermore, professionals prefer to buy dips. Speculators tend to chase the market higher.
James Hyerczyk
Natural Gas
Natural Gas

Natural gas futures are trading higher on Tuesday, but investors are giving back earlier gains as they continue to assess the latest weather forecasts and demand projections. The latest projections from the National Weather Service (NWS) call for below-average cold temperatures over the near-term. This news helped boost prices on Monday.

At 1200 GMT, December Natural Gas is trading $3.333, up $0.23 or +0.69%.

Prices surged earlier in the session to $3.377, but the rally stalled as the market approached last week’s high at $3.409. That top was put in as investors assessed potential damage from Hurricane Michael.

The new weather pattern investors are watching showed up in the models over the week-end. They show an early-season cold snap for most of the country. The new 11 to 15-day forecast shows a blast of cold hitting the U.S., particularly in the South and in the Midwest.

This report is being called a surprise because earlier forecasts called for warmer temperatures into December then for cold to arrive in January and primarily in February. During October, cooling and heating demand is usually equally balanced. However, this month started with near-record heat then temperatures flipped to cold.

Forecast

With natural gas storage at low levels as we near the start of the winter heating season, prices are expected to remain firm. The amount of natural gas in storage is below the five-year historical range. At 2,956 billion cubic feet, as of October 5, it was slightly higher than the week before but still well below the five-year historical range.

The long-term plan is to get long and stay long throughout the winter, however, there are going to be short-term swings due to changing weather patterns and strong production. In other words, don’t expect a prolonged rally unless there is a lingering cold spell. Furthermore, professionals prefer to buy dips. Speculators tend to chase the market higher.

Despite the potentially bullish weather pattern, the direction of the December Natural Gas futures today is likely to be determined by trader reaction to the 50% level at $3.306.

A sustained move over $3.306 will indicate the presence of buyers. This will put the market in a position to challenge $3.409 over the near-term. If $3.306 fails as support then prices could retreat into at least $3.202 to $3.161 over the near-term.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US