Natural Gas Price Fundamental Daily Forecast – Upside Bias Could Drive Market into $2.774 to $2.823

Natural gas futures finished higher on Thursday after the government reported a bigger drop in storage than estimated. This produced enough short-covering to fuel a small gain.

April Natural Gas settled at $2.698, up $0.031 or +1.16%.

According to the U.S. Energy Information Administration, storage decreased 78 billion cubic feet (Bcf) to 1.682 trillion cubic feet (Tcf) in the week-ended February 23.

The withdrawal was greater than the 71 Bcf consensus forecast. The draw as much more than the 7 Bcf pull reported during the corresponding week in 2017, but less than the five-year average pull of 118 Bcf, according to EIA data.

As a result, stocks were 680 Bcf, or 28.8%, less than the year-ago level of 2.362 Tcf and 372 Bcf, or 18.1%, less than the five-year average of 2.054 Tcf.

Forecast

The main trend is down according to the daily swing chart, but a support base may be building.

The main range is $2.983 to $2.565. Its retracement zone at $2.774 to $2.823 is the primary upside target. Sellers could come in on a test of this zone.

The short-term range is $2.565 to $2.731. Its 50% level or pivot at $2.648 has been acting like support. The short-term direction of the market is likely to be determined by trader reaction to this level.

NatGasWeather.com updated its forecast for March 1 to March 7. “The Eastern U.S. will be mild again today, then cooling Friday-Saturday as a storm spins up and strengthens with areas of rain and snow, but overall jut not able to tap much subfreezing air. High pressure will return over much of the east-central U.S. Sunday-Monday, followed by colder systems for the middle of next week. A powerful winter storm with heavy rain and snow will move into the West through the weekend, including California, with additional systems next week. Demand overall will be moderate.”