Natural Gas Price Fundamental Daily Forecast – Trader Reaction to $2.622 Sets Tone into Close

Natural gas futures are trading lower shortly after the regular session opening on Tuesday. Bearish overnight forecast helped cap the market following strong gains the previous session.

According to NatGasWeather, overnight changes in the weather data included a loss of 13 heating degree days from the Global Forecast System, a result of weaker cold projected for the March 28-April 2 time frame, according to NatGasWeather.

At 16:49 GMT, May natural gas futures are trading $2.576, down $0.043 or -1.64%.

The European model remained “little changed” overnight and showed slightly stronger demand for this time period, but both models “are emphatically bearish,” the firm said. “In fact, the pattern is quite awful/warm/bearish for days 12-15” and this is likely to carry over to days 16-20 as well.

“…If prices were to rally further, it would be due to strong” liquefied natural gas (LNG) feed gas demand “or technical or seasonal buying instead of cold weather patterns and strong demand,” NatGasWeather said.

Energy Information Administration Weekly Storage Report

The EIA reported on March 18 that domestic supplies of natural gas declined by 11 billion cubic feet for the week-ended March 12. On average, the report was expected to show a decline of 17 billion cubic feet for the period, according to analysts polled by S&P Global Platts.

Total stocks now stand at 1.782 trillion cubic feet, down 253 billion cubic feet from a year ago and 93 billion cubic feet below the five-year average, the government said.

Natural Gas Intelligence (NGI) wrote on Tuesday, Looking ahead to Thursdays storage report from the U.S. Energy Information (EIA), NGI is modeling a 17 Bcf withdrawal for the week ended March 19. That would compare with a 26 Bcf withdrawal recorded in the year-ago period and a five-year average 51 Bcf pull.

Energy Aspects issued a preliminary estimate for a 10 Bcf withdrawal for the upcoming report. The firm modeled no change week/week in heating degree days, while LNG feed gas demand increased an estimated 0.6 Bcf/d for the week “as Corpus Christi ramped up to 2.4 Bcf/d midweek, or over 95% utilization at all three of its trains.”

The main range is $2.352 to $3.060. The market is currently trading on the weak side of its retracement zone at $2.622 to $2.706.

The market needs to overcome $2.622 in order to shift momentum to the upside.