Natural Gas Price Fundamental Daily Forecast – With Summer Ending, Traders Preparing for Drop in Demand

Monday was a U.S. bank holiday so the major exchanges were closed. There was limited Natural Gas trading on the electronic exchange, but volume was well below average. Nat gas finished the light session lower as investors started to react to the end of summer and the start of low-demand season.

October Natural Gas futures settled the session at $3.019, down 0.051 or -1.66%.

When trading resumes on Tuesday, investors are likely to react to any news regarding production. This is because last week’s flooding in the Texas Gulf Coast area shut down supply at least temporarily.

Forecast

With production slowing moving back towards normal, investors are going to be shifting their focus back towards the traditional influencing factors like seasonality.

With summer coming to an end and fall beginning in about 17 days, traders are preparing for a drop in demand. This is because temperatures are not likely to be too hot or too cold. Prices tend to drop during this period because of low demand.

In other news, to recap last week’s U.S. Energy Information Administration’s weekly storage report, total natural gas in storage currently stands at 3.155 trillion cubic feet, or around 7.0% lower than levels at this time a year ago and less than 1.0% above the five-year average for this time of year.

Looking ahead to Thursday’s weekly EIA report, traders are looking for a build in the range of 58 to 67 billion cubic feet in the week ended September 1. That compares with a gain of 30 billion cubic feet in the preceding week, a build of 36 billion a year earlier and a five-year average rise of 58 billion cubic feet.

The people at natgasweather.com are predicting a brief eastern U.S. warm up over the southern Great Lakes and East on Sunday to Monday before an unseasonably cool weather system arrives next week for a return to light national demand.

Overall, national natural gas demand will be moderate to low.

There’s another hurricane brewing in the Atlantic. Current forecasts are calling for it to hit Florida late in the week. This should have a minimal effect on natural gas demand.