Natural Gas Price Fundamental Daily Forecast – Underpinned by Firm Cash Prices, Capped by Record Production

Basically, look for a downside bias on a sustained move under $2.478 with $2.388 to $2.371 the next major targets. Overcoming $2.478 will indicate the short-covering is getting stronger. But bearish traders won’t have to worry about the long side unless the buying is strong enough to take out $2.568.
James Hyerczyk
Natural Gas

Natural gas prices are inching lower on Wednesday, shortly after the cash market opening. The overnight trade was a little tentative as prices remained inside Monday’s wide range although near the lower end of the trading range. The price action suggests the selling is slowing as the market approaches Monday’s low at $2.413 and the October low at $2.388.

At 12:01 GMT, December natural gas futures are trading $2.428, down $0.021 or -0.86%.

The market finished slightly higher on Tuesday, failing to follow-through to the downside after a steep sell-off the previous session.

Helping to underpin prices and dampen the selling pressure are strong cash prices and supportive weather data.

According to Natural Gas Intelligence, “Cash prices continued to strengthen as a strong weather system tracked across the Midwest and into the East with rain and snow, while others were fresh on its tail. One glaring exception to the overall market strength was in the Permian Basin, where prices once again plunged below zero.”

Short-Term Weather Outlook

According to NatGasWeather for October 23 to October 29, “As one weather system exits the East, a new weather system and associated cold shot will dive down the Rockies & Plains today, then deep into Texas and the South Thursday with heavy showers. Lows behind these two systems will be in the 20s and 30s, coldest over Rockies and North Plains.”

“The rest of the southern US will be mostly comfortable with highs of 60s to 80s for light demand. A break between weather systems will occur over the southern and eastern US Sunday through Monday as highs warm into the 60s and 70s. At the same time, the coldest system in the coming series will arrive into the Rockies & Plains with lows of 10s to 30s for strong demand. Overall, national demand will be moderate to high, then high to very high mid-next week.”

Daily Forecast

NatGasWeather is asking the question, “While a week of solid cold is helpful, is it going to be enough to resume the strong rally if warming quickly follows, especially when considering yet another record in production?”

This question suggests traders will take a neutral stance toward the market on Wednesday, and may have decided to wait until they see the government storage figures on Thursday before making their next move.

The short-term range is the October 4 top at $2.568 and the October 11 bottom at $2.388. This makes its 50% level or pivot at $2.478, the key level to watch for direction.

Basically, look for a downside bias on a sustained move under $2.478 with $2.388 to $2.371 the next major targets. Overcoming $2.478 will indicate the short-covering is getting stronger. But bearish traders won’t have to worry about the long side unless the buying is strong enough to take out $2.568.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US