Natural Gas Price Fundamental Daily Forecast – Warmer Weather Expected; Strong Over $3.080 then $3.152

Natural gas futures rallied on Wednesday on forecasts for warmer weather over the next two weeks that is expected to drive up air-conditioning demand.

November Natural Gas futures settled at $3.118, up $0.051 or +1.66%.

According to Thomson Reuters, projected U.S. gas consumption would rise to 72.5 billion cubic feet per day next week from 67.9 bcfd this week if the warmer weather arrives and air conditioning demand increases.

Demand this week, however, is expected to be down from 69.3 bcfd seen last week because Hurricane Irma reduced power consumption in Florida and the rest of the Southeast.

In the past 30 days, U.S. gas production in the lower 48 states rose to an average of 73.1 bcfd from 71.5 bcfd a year earlier. That was far short of the 74.3 bcfd during the same time in 2015, when output was at a record high.

Data also showed that U.S. exports were expected to average 8.5 bcfd this week, up 13 percent from a year earlier. This is because of stepped up deliveries from Louisiana. Exports fell when Hurricane Harvey disrupted the natural gas industry about three weeks ago.

Forecast

About 5 million customers, or about 10 million people, were without power on Wednesday morning in Florida, Georgia and the Carolinas after Hurricane Irma, down from a peak of over 7.8 million customers on Monday.

Today’s U.S. Energy Information Administration’s weekly storage report is expected to show utilities added 63 billion cubic feet of gas into storage during the week-ended September 8, leaving inventories near normal for this time of year.

Buy stops could bet hit over $3.152 if the storage report is bullish. However, gains are likely to be limited because of a pair of tops at $3.198 and $3.200.

The first sign of weakness will be a move under $3.080. A trade under $3.043 will indicate the selling is getting stronger.