Natural Gas Price Fundamental Daily Forecast – Worries Over First Injection of the Season Capping Gains

Natural gas futures are edging lower late Wednesday, pressured by a bearish weather outlook and worries about the first injection of the season in tomorrow’s government storage report. Perhaps underpinning the market are firmer cash prices ahead of cold temperatures expected to hit the Midwest and East Coast over the next several days. Robust liquefied natural gas (LNG) demand also remains supportive.

At 17:33 GMT, May natural gas futures are trading $2.616, down $0.007 or -0.27%.

Short-Term Weather Outlook

According to NatGasWeather for March 31 to April 6, “A strong cold shot will sweep across the Midwest, Mid-Atlantic, and Northeast the next few days with showers and thunderstorms ahead of the cold front and snow showers behind it. With lows of 10s to 30s over much of the northern and eastern U.S. Thursday – Friday, national demand will be strong despite the western, southern and central U.S. being mild to warm with highs of 50s to 80s. High pressure will build over much of the U.S. late this weekend through next week with highs of 60s to 80s for light demand, besides hotter 90s in the Southwest deserts. Cooler exceptions for next week will be over the showery West Coast and far Northeast corner. Overall, moderate demand Wednesday, high Thursday – Friday, then light this weekend and next week.”

US Energy Information Administration Storage Report

Natural Gas Intelligence (NGI) is reporting that ahead of Thursday’s EIA storage report, Energy Aspects issued a preliminary estimate for a 14 Bcf injection for the week ended March 26. The firm estimated a nearly 20% week/week decline in heating degree days and a 5.7 Bcf/d drop in residential/commercial demand for the period. Power burns were down an estimated 1.0 Bcf/d week/week, with production up just 0.1 Bcf/d.

Daily Forecast

The main trend is down, however, momentum is trending higher. A trade through $2.750 will change the main trend to up. A move through $2.459 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum.

The main range is $3.060 to $2.459. The market is currently trading inside its 50% to 61.8% retracement zone at $2.706 to $2.622. This zone is controlling the near-term direction of the market.

Look for a bullish tone to develop on a sustained move over $2.706 and a breakout over $2.750. Watch for the bearish tone to resume on a sustained move under $2.622.

The minor range is $2.459 to $2.688. Its retracement zone at $2.574 to $2.546 is potential support. The upper level of this zone may have stopped the selling early Wednesday.