Natural Gas Price Fundamental Daily Forecast – Trader Reaction to $5.963 to $6.111 Sets the Tone

Natural gas futures are inching higher early Friday after posting a slightly better close the previous session. Prices jumped on Thursday after the government reported a smaller-than-expected storage build, but sellers came in strong when the market touched retracement zone resistance at $5.963 to $6.111. Trader reaction to this zone is likely to set the tone on Friday.

At 07:33 GMT, December natural gas is trading $5.890, up $0.053 or +0.91%.

US Energy Information Administration Weekly Storage Report

The EIA reported on Thursday that domestic supplies of natural gas rose by 81 billion cubic feet (Bcf) for the week-ended October 8. That was a bit lower than the average increase of 89 Bcf forecast by analysts polled by S&P Global Platts.

According to NGI, injection estimates were wide ranging ahead of the report, with some analysts calling for another triple-digit build. Reuters polled 16 analysts, whose estimates ranged from builds of 85 Bcf to 112 Bcf, with a median injection of 95 Bcf. A Bloomberg survey of 11 analysts produced injections as low as 84 Bcf, with a median 97 Bcf. NGI modeled a 93 Bcf injection.

Total stocks now stand at 3.369 trillion cubic feet (Tcf), down 501 Bcf from a year ago and 174 Bcf below the five-year average, the government said.

Daily Forecast

Technically, the main trend is down on the daily chart. A trade through $6.593 will change the main trend to up, while a move through $5.332 will signal a resumption of the downtrend.

The main range is $3.944 to $6.593. Its 50% to 61.8% retracement zone at $5.269 to $4.956 is the nearest downside target and value area. This zone is controlling the near-term direction of the market.

The short-term range is $6.593 to $5.332. Its retracement zone at $5.963 to $6.111 is the primary upside target. This zone stopped the buying on Thursday.

Overtaking $6.111 will indicate the buying is getting stronger. This could trigger an acceleration to the upside.

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