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Natural Gas Price Fundamental Daily Forecast

May natural gas futures are inching lower on Tuesday, but the price action suggests counter-trend buyers may be trying to establish a support base inside a key technical zone. Although we feel we’ve identified a potential support area, the market still lacks a catalyst to drive it higher, given the low weather-related demand and steady production.

At 13:29 GMT, May natural gas futures are trading $2.683, down $0.015 or -0.56%.

Short-Term Weather Forecast

According to NatGasWeather for March 9 to March 14, “Most of the U.S. will be mild to warm this week with highs of 50s and 60s across the northern U.S. and 60s to lower 80s across the southern U.S. Cooler exceptions will be over New England early in the week and across the West mid-week as weather systems bring showers. Cold air arriving into the Rockies and Plains early next weekend will spread south and eastward after with lows of 10s to 30s gaining in coverage for stronger demand.”

Steady Production Capping Gains

Production, which had recovered from the freeze-offs caused by the Arctic blast that derailed Texas’ energy system in February, held steady on Monday at 90 Bcf, according to Natural Gas Intelligence (NGI).

Against that backdrop, traders fretted about supply/demand uncertainty created by the weather outlook and punctuated by last week’s bearish Energy Information Administration (EIA) inventories report, Bespoke Weather Services Said.

US Energy Information Administration Weekly Storage Report

The EIA on Thursday reported a 98 Bcf withdrawal from U.S. gas stocks for the week-ended February 26. Analysts were looking for a triple digit pull, so the report was deemed disappointing.

Working gas in storage was 1,845 Bcf as of Friday, February 26, 2021, according to EIA estimates. This represents a net decrease of 98 Bcf from the previous week. Stocks were 277 Bcf less than last year at this time and 178 Bcf below the five-year average of 2.023 Bcf. At 1,845 Bcf, total working gas is within the five-year historical range.

Daily May Natural Gas

Daily Forecast

The main trend is down according to the daily swing chart. The next two swing bottom targets come in at $2.615 and $2.527. The main trend will change to up on a move through $2.916.

The main range is $2.352 to $3.060. The market is currently testing its 50% to 61.8% retracement zone at $2.706 to $2.622. This zone is controlling the near-term direction of the May natural gas futures contract.

Look for a bullish tone to develop on a sustained move over $2.706, and a bearish tone on a sustained move under $2.622. Holding between $2.706 and 2.622 will indicate trader indecision and possibly an early sign that momentum is getting ready to shift to the upside.

For a look at all of today’s economic events, check out our economic calendar.

Read More: Natural Gas Price Fundamental Daily Forecast

2021-03-10 19:10:51

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