Natural Gas Price Fundamental Daily Forecast- Mixed Demand Picture for Monday

Natural gas prices opened steady to better on Monday. Traders are likely digesting the weather reports that came in over the week-end, looking for any major changes. It’s that time of year when most traders don’t expect weather to be an issue since the transition from summer to fall tends to bring mild temperatures. Because of this, there may be an over-reaction to any weather-related news especially since volume is usually low at this time of season.

From a technical standpoint, the market is sitting inside a pair of ranges. The first range is $2.957 to $3.214. Its 50% level is $3.086. The second range is $3.214 to $2.974. Its retracement zone is $3.094 to $3.122.

The combination of the two retracement zones makes the key area to watch the 50% price cluster at $3.086 to $3.094. This zone stopped the rally last week.

With prices currently hovering around $3.010, I don’t think buyers are even going to consider a trade unless the market drops back near the bottoms at $2.974, $2.957 and $2.954.

The only way the market is going to take off to the long-side from the current price is if there is surprise news. And even if this occurs, the buying is going to have to be strong enough to take out $3.094. I don’t think short-covering is going to be enough to do this.

Therefore, I have to conclude that we’re going to sit in a range over the near-term, bounded by $3.086 to $3.094 and $2.954 to $2.957.

We’re expected to see some big changes in the weather this week, but nothing that is supposed to be long-lasting. Another burst of summerlike heat is expected to hit much of the eastern half of the country through this week as a ridge builds in the East.

On Monday, high temperatures up to 20 degrees above average are expected from the mid-Mississippi Valley into the Great Lakes and the interior Northeast. That warmth should only spread to much of the East Coast later in the week ahead of a cold front that will gradually slide in.

This likely means the Great Lakes and Northeast will see daytime highs in the 80s. However, we’re not expecting to see 90-degree heat across the Midwest like we saw in early September.

By late week, the heat is expected to move out of the Midwest and temperatures will return to near normal for this time of year.

The west is expected to be cold.

Demand will be down in the east and up in the west. Overall, this translates to moderate demand nationwide.