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James Hyerczyk
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Natural Gas

Natural gas futures are inching higher on Monday shortly after the regular session opening. Traders are keeping their eye on the developments in Egypt, where reports are saying the ship blocking the Suez Canal has been floated and could soon be in a position to begin moving again.

Additionally, while exports are expected to remain strong for liquefied natural gas (LNG), the latest weather forecasts continue to point toward low near-term demand.

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At 13:14 GMT, May natural gas is trading $2.629, up $0.010 or +0.38%.

Suez Canal Update

EBW analysts are saying efforts to clear the waterway “are at a critical stage, with a 50% chance it will be cleared quickly but an equal chance of a prolonged delay,” they added. “Gas prices could rise further if efforts to re-float the vessel blocking the canal fail during the next 24 hours, but are likely to drift lower in the canal reopens soon.”

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Short-Term Weather Outlook

According to NatGasWeather for March 29 to April 4, “The central and southern U.S. will be nice the next few days as high pressure roles with highs of 60s to 80s. One weather system will sweep across the Northeast and Mid-Atlantic with showers through Monday, although rather mild with highs of 40s to 60s. A colder system over the Northwest will bring areas of rain and snow then advancing across the Plains Tuesday and Northeast Wednesday – Friday with lows of 10s to 30s for strong national demand. Overall, moderate demand through Wednesday, then high Thursday – Friday.”

Energy Information Administration Weekly Storage Report

The EIA reported a withdrawal of 36 Bcf from natural gas storage for the week ended March 19, a pull that was steeper than market expectations and the year earlier draw of 26 Bcf.

This week, Natural Gas Intelligence (NGI) is modeling an 18 Bcf injection. An injection would be bearish versus historical norms.

Daily May Natural Gas

Daily Forecast

Technically, the main trend is down. A trade through $2.750 will change the main trend to up. A move through $2.459 will signal a resumption of the downtrend.

The main range is $2.352 to $3.060. Its retracement zone at $2.622 to $2.706 is controlling the near-term direction of the market.

A sustained move over $2.622 will indicate the presence of buyers. If this creates enough upside momentum then look for a possible surge into $2.706.

For a look at all of today’s economic events, check out our economic calendar.
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