Yahoo Finance Natural Gas Price Fundamental Daily Forecast – Demand Likely Dropped Materially Last Week
Natural gas futures are trading higher early Monday. Prices continue to consolidate inside a tight five-day range. This suggests investor indecision and impending volatility with a slight bias to the upside.
At 0838 GMT, April Natural Gas futures are trading $2.643, $0.045 or +1.73%.
A weather system tracked across the Midwest and Northeast over the week-end with rain and snow showers, with lows dropping into the 20s to – 0s for a swing back to stronger demand.
According to NatGasWeather.com for February 12 to February 22, “Temperatures will warm right back up this week over the southern and eastern U.S. with highs of upper 50s to lower. The western and central U.S. will see weather systems for periods of colder conditions. Late next week, minor cooling will sweep across the Northeast. Demand over the next week will be moderate.
Last week, the U.S. Energy Information Administration (EI) announced an estimated 194 Bcf draw from storage for the week-ended February 9, above the 183 Bcf draw expected by a consensus of analysts, and well above the 154 Bcf withdrawal average over the past five years.
The withdrawal brought the national stock deficit to the five-year average to an estimated 18.7%, according to the EIA data.
Forecast
The daily chart pattern indicates impending volatility due to the consolidating price action.
If buyers take out $2.661 with conviction then we could see an extension of the rally into at least $2.774.
If sellers take out $2.565 with rising volume then look for a possible breakdown into $2.487.
According to the National Weather Service and NatGasWeather.com, the most recent eight-to-14-day weather outlook calls for a likelihood of warmer-than-average temperatures in the Northeast, Southeast, and Midwest.
The forecast for warmer weather is expected to impact U.S. demand in the coming weeks, as over the next eight-to-14-days, U.S. demand is forecast to average 82.9 Bcf/d, an 11.3 Bcf/d drop from the average of 94.2 Bcf/d during the month of February, according to S&P Global Platts Analytics.
Looking ahead to next week’s EIA report, the market is expecting a 110 Bcf draw for the week-ending February 16. This will be slightly better than the -92 Bcf from last year and the -145 Bcf five-year average.
In summary, demand likely dropped materially last week as weather was warmer than normal. Additionally, bearish weather is expected to continue into the end of the month.
This article was originally posted on FX Empire
