Natural Gas Price Fundamental Daily Forecast – Traders Focusing on Lower Demand After December 15

Natural gas futures are under pressure early Thursday as sellers return after posting a modest gain on Wednesday. Short-term, it’s going to be cold on the East Coast of the U.S. However, traders are looking ahead to the forecasts after December 15 which call for mild temperatures for this time of year.

NatGasWeather.com is saying that “A strong cold front with rain and snow continues to sweep across the country and will reach the East today. Behind the cold front, temperatures will drop into the single digits to 20s across the northern U.S., and into the 30s and 40s over the southern U.S. The West will warm as the week progresses. There will be a brief between cold shots Monday, with a stronger one arriving Tuesday to Thursday next week. Overall, national demand will rapidly increase to high.”

If this forecast is correct then the warm weather from the West should move into the Midwest then East Coast sometime after next Thursday, or December 15. This is what is driving prices lower. After the 15^th, demand is likely to drop to normal to below normal.

Forecast

Looking ahead to Thursday’s U.S. Energy Information Administration report, traders are expecting a draw of about 8 billion cubic feet (bcf) for the week-ending December 1.

The momentum is down and the selling pressure is increasing early Thursday. Unless there is a major shift in the weather forecast for late next week, or the EIA report comes in bullish enough to trigger a short-covering rally, the free fall is likely to continue with $2.720 the next major target.