Natural Gas Price Fundamental Daily Forecast – Weather Outlook Neutral, $2.709 Controlling Price Action

The key level to watch for May Natural Gas futures traders is $2.709. Trader reaction to this level will set the tone for the day. Currently, this price is acting like resistance, indicating traders may be betting on lower demand.
James Hyerczyk
Natural Gas

Natural gas futures are trading nearly flat on Wednesday, but inside yesterday’s range. The price action indicates investor indecision and impending volatility. The indecision is likely being fueled by mixed weather forecasts and concerns over loose shoulder season balances. Prices are likely being capped by weaker cash market prices, but underpinned by last Friday’s technical reversal chart pattern.

At 11:14 GMT, May Natural Gas is trading $2.699, unchanged.

Short-Term Weather Outlook

According to NatGasWeather for April 10 to April 16, “A strong spring storm with heavy rain and snow will track through the Rockies and Plains today, then across the Great Lakes Thursday. Lows behind the cold front will drop into the 20s and 30s across the central and northern US the next few nights for stronger demand. The southern US will be very warm to locally hot with highs of 70s to 90s, while milder over the West Coast with mostly 50s to 70s. Slightly stronger cooling will spread across the northern and central US Saturday to Tuesday with lows of 20s and 30s for stronger national demand. Overall, national demand will be increasing to moderate to high.

EIA Sees Higher US Natural Gas Consumption Growth, Greater Use This Summer

From Platts, “The US Energy Information Administration on Tuesday has boosted its forecast for US natural gas consumption for the full year 2019 and now expects gas use to rise by 3%, or 2.5 Bcf/d, in 2019, up from the expected growth of 1.8%, or 1.5 Bcf/d, the agency predicted a month earlier.”

“In its summer fuels outlook, also released Tuesday, EIA predicted gas will make up the largest share of electric generation by the power sector for the upcoming summer, supplying 40% of the total, up from 39% last summer, while coal-fired generation for the season slides to 25%, down from 28% the prior summer.”

Daily Forecast

The key level to watch for May Natural Gas futures traders is $2.709. Trader reaction to this level will set the tone for the day. Currently, this price is acting like resistance, indicating traders may be betting on lower demand.

A sustained move over $2.709 will indicate the presence of buyers. If this generates enough upside momentum then look for the rally to possibly extend into $2.745.

A sustained move under $2.709 will signal the presence of sellers. This could trigger a short-term break into $2.679.

Unless there is a major shift in the weather forecast, prices are likely to remain rangebound as traders prepare for Thursday’s EIA weekly storage report. Traders are expecting an injection of 10 Bcf.

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