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Natural Gas Price Fundamental Daily Forecast – Trend Changed to Up with Buyers Eyeing Breakout Over $2.706

By:
James Hyerczyk
Published: Apr 16, 2021, 13:14 UTC

In a note to clients on Thursday, NatGasWeather characterized the temperature outlook as “solidly bullish” through April 24.

Natural Gas

In this article:

Natural gas futures are edging higher shortly after the opening on Friday as weather concerns dominated the trade for a second session. This follows yesterday’s abrupt reversal to the upside. Chilly April weather is driving the price action although Thursday’s government storage report did come in on the low end of expectations.

At 12:53 GMT, May natural gas is trading $2.689, up $0.031 or +1.17%.

US Energy Information Administration Weekly Storage Report

The EIA reported on Thursday that domestic supplies of natural gas rose by 61 billion cubic feet (Bcf) for the week ended April 9. That compares with an average increase of 65 Bcf forecast by analysts polled by S&P Global Platts.

Ahead of the report, Natural Gas Intelligence (NGI) reported that a Bloomberg survey found injection estimates ranged from 62 Bcf to 79 Bcf, with a median of 66 Bcf. The median of a Reuters poll landed at a build of 66 Bcf; injection estimates spanned 50 Bcf to 79 Bcf. NGI forecasted an injection of 67 Bcf for the period.

Total stocks now stand at 1.845 trillion cubic feet (Tcf), down 242 Bcf from a year ago but 11 Bcf above the five-year average, the government said.

Short-Term Weather Outlook

In a note to clients on Thursday, NatGasWeather characterized the temperature outlook as “solidly bullish” through April 24, with a ‘series of colder-than-normal weather systems” expected to “sweep across the country, coldest over the Midwest and Great Lakes.”

Analysts at EBW Analytics Group in a recent note pointed to colder April temperatures and “continued strength in core market fundamentals” as the key drivers behind recent gains in the May futures contract.

Daily May Natural Gas

Daily Forecast

Technically, the main trend is up according to the daily swing chart. The trend turned up when buyers took out the last main top at $2.688 earlier today. The trend will change down on a move through $2.453.

The minor trend is also up. A trade through $2.583 will change the minor trend to down. This will shift momentum to the downside.

The market is currently trading inside a major 50% to 61.8% retracement zone at $2.706 to $2.622. This zone is controlling the near-term direction of the market.

The short-term range is $3.060 to $2.453. If the upside momentum continues then look for a test of its retracement zone at $2.757 to $2.828. Sellers could come in on a test of this area.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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