Natural Gas Price Fundamental Daily Forecast – Underpinned by Cooler Forecasts, Capped Ahead of EIA Report

Natural gas futures are slightly higher late in the session on Wednesday, but well off their intraday high. The market is holding support, but the early rally fell short of the last main top at $2.688. A trade through this level will change the main trend to up.

The market continues to be underpinned by weather forecasts calling for cooler temperatures and high liquefied natural gas (LNG) export volumes, but gains are likely being capped due to general uncertainty ahead of Thursday’s U.S. Energy Information Administration (EIA) storage report.

At 16:36 GMT, June natural gas futures are trading $2.630, up $0.011 or +0.42%.

Bespoke Weather Services Outlook

Colder trends over the previous 24-hours from both the American and European models added 10-12 gas-weighted degree days (GWDD) to the forecast over the next two weeks, Bespoke Weather Services said early Wednesday and Natural Gas Intelligence (NGI) reported.

The colder changes resulted from models showing “more chill in the Midwest and East over the next couple weeks,” the firm said. “…It remains difficult for weather to move the needle much at this time of year, but double-digit GWDD changes in a 24-hour period are noteworthy…We continue to look for a warming trend around the end of the month into early May, though nothing yet that leads us to believe we see a big early-season spike” in cooling degree days.

Maxar Weather Desk Outlook

Maxar’s Weather Desk made cooler changes to its updated forecast Wednesday for the six to 10 day period, starting Monday and continuing through April 23. The most notable shifts occurred in the Rockies and Midwest, according to the forecaster.

“High pressure, which has Canada origins, will carry a round of much below normal temperatures in these regions from early to mid-period,’ Maxar said. “Below normal temperatures are common in the Mid-Continent, with the exceptions being Texas late in the period. Texas moderates closer to normal on days nine and 10 along and in advance of low pressure.”

Further out in the 11-15 day time frame, from April 24-28, Maxar said its forecast “remains of lower than usual confidence for the lead time, with uncertainty pertaining to west Pacific Tropical Storm Surigae.”

Maxar’s latest forecast for the 11-15 period as of early Wednesday showed above normal temperatures over the Southwest and normal temperatures for the East Coast.

Daily Forecast

The price action suggests the futures market has already priced in the shift toward cooler temperatures into the latter half of the month. Therefore, we’re not looking for too much more upside pressure unless the cold extends into late April and early May.

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