Natural Gas Price Fundamental Daily Forecast – Trader Reaction to $4.867 – $4.649 Will Set Near-Term Tone

Natural gas futures are inching lower shortly before the New York opening on Tuesday with prices moving ever so close to an important support area at $4.867 to $4.649. Trader reaction to this price zone should determine whether the market revisits the upper $5.00 area or the lower $4.00 area over the near-term. The main catalysts producing four consecutive lower-lows are forecasts calling for cooler temperatures and moderate demand.

At 11:31 GMT, December natural gas futures are trading $5.080, down $0.052 or -1.01%.

Short-Term Weather Outlook

According to NatGasWeather for September 21-27, “A weather system with showers and thunderstorms will exit the Northwest and track across the Midwest and into the Great Lakes/Ohio Valley the next few days with comfortable highs of upper 60s to lower 80s.

The nation’s strongest demand will be from California to Southern Texas as high pressure brings hot highs of 90s to near 100 degrees Fahrenheit, although cooler over Northern Texas and the South with highs of 80s.

National demand will drop to very light levels late this week into next weekend as highs of upper 60s to 80s rules most of the U.S. and with very little coverage of 90s. Overall, national demand will be low to very low into the foreseeable future.”

Thursday’s EIA Storage Report Expected to Come in Higher than Five-Year Average

Thursday’s U.S. Energy Information Administration storage report is expected to come in slightly above historical norms. NGI’s model is calling for an 82 Bcf injection into natural gas stocks for the week-ended September 17.

Last year, the EIA recorded a 70 Bcf injection for the similar week, and the five-year average injection is 74 Bcf.

Daily Forecast

Keep an eye on LNG exports and the soaring prices around the world. Bespoke Weather Services is reporting that a global supply crunch continues to put upward pressure on prices in Europe, the UK and Asia. The situation is so bleak that Goldman Sachs analysts predict that parts of Europe will be burning oil this winter to stay warm.

This could also influence markets in the United States because American exports of liquefied natural gas (LNG) are in high demand to fortify overseas stockpiles ahead of winter, when gas consumption peaks to heat homes and businesses.

U.S. firms are selling where they can generate the most profit, but that may not be the best thing to do with U.S. supplies at low levels. If the coming winter proves particularly cold, domestic supplies could run low and prices could shoot up once again beyond the $5.00 level.