Natural Gas Price Fundamental Daily Forecast – Weather Pattern Remains Solidly Bullish Until November 17

Natural gas is trading slightly lower Wednesday, shortly before the regular session opening, but clawing back its earlier losses as traders continue to assess the impact of the current weather forecasts on demand. Despite Tuesday’s minor setback and Monday’s huge gap-higher, the forecasts showing colder-than-normal temperatures taking hold throughout much of the country remain supportive enough to draw in new buyers on weakness.

At 1038 GMT, December Natural Gas futures are trading $3.536, down $0.019 or -0.53%.

NatGasWeather.com for the period November 7 to November 13 says, “Cold air will pour out of Canada into the north-central U.S. today, then spreading across the Great Lakes and east-central U.S. Thursday-Friday with lows of teens to 30s, locally single digits. The East will be mostly mild the next several days with highs of 50s to 70s, locally 80s, but will cool this weekend into the 30s and 40s. The southern U.S. will be mostly mild to warm with highs of 60s to 80s, although with areas of showers as a cool front stalls just north. California and the West will be mostly mild to warm with highs of 60s to 80s. Overall, demand will be increasing to high.

Forecast

The mid-term weather patterns remain solidly bullish through November 16 to 17, then neutral November 18 to 20.

As we approached the start of the winter heating season, traders thought the United States would exit the winter with about 1.5 trillion cubic feet of natural gas in storage. This assessment was based on soaring natural gas production and forecasts for a mild winter. It now appears storage at the end of the season is likely to be closer to 1.2 trillion to 1.3 trillion cubic feet. And an extremely cold winter could cut another 400 billion to 500 billion cubic feet.

The timing of the jump in prices is spooking traders because starting the season with a huge drawdown in supply leaves it vulnerable the entire season to lingering cold systems or Arctic Domes, much like we saw during the winter of 2014 when prices rose about $5.00.

The $3.60 to $3.68 area remains the upside target over the near-term. The gap-opening suggests the support is the former top at $3.409.