Natural Gas Price Fundamental Daily Forecast – Traders Waiting for Midday Forecasts

Natural gas futures are edging higher on Monday shortly after the cash market opening. Heading into the weekend, the forecast was bearish with traders primarily focusing on the milder trending December 20-26 time period. However, there were no significant shifts over the weekend, leading to a surprise flat opening. Many traders were expecting to see a shift in the forecast and a gap opening.

At 13:14 GMT, February natural gas is trading $2.297, up $0.015 or +0.66%.

Short-Term Weather Forecast

According to NatGasWeather for December 13 to December 19, “Milder conditions will spread across the country the next few days with highs of upper 40s to 70s gaining in coverage, warmest across Texas and the South for light national demand. Demand will increase early next week as cooling returns across many regions of the U.S., coldest across the Midwest and Northeast as lows of -0s to 20s return, along with areas of rain and snow. Reinforcing cool air will continue across the Northeast late next week, while the rest of the country warms above normal. Overall, moderate-low demand through Sunday and back to high early next week.

U.S. Energy Information Administration Weekly Storage Report

The EIA reported Thursday that domestic supplies of natural as fell by 73 billion cubic feet for the week-ending December 6. Analysts were looking for a 74 billion cubic feet drawdown, on average.

Total stocks now stand at 3.518 trillion cubic feet, up 593 billion cubic feet from a year ago, but 14 billion cubic feet below the five-year average, the government said.

U.S. Drops Four Natural Gas Rigs

According to Baker Hughes, the U.S. natural gas rig count fell by four to 129 for the week ended Friday.

Daily Forecast

There was no gap opening on Monday, which likely means there was no significant shift in the weather forecast over the weekend although the early price action suggests a slight bias to the upside.

We’re looking for heightened volatility later in the session with the release of the midday forecasts. These forecasts should set the tone into the close and perhaps the entire week.

A bullish forecast could lead to a test of a short-term retracement zone at $2.428 to $2.489 later this week. A bearish report is likely to mean a test of last week’s low at $2.169.