Yahoo Finance Natural Gas Price Fundamental Daily Forecast – Heat Could Extend into July 12
Natural gas futures are trading higher shortly after the opening on Tuesday amid updated weather forecasts calling for strong heat for much of the country through the first half of July. On Monday, the nearby futures contract posted a strong double-digit advance, boosted by updated outlooks for more extreme July heat that could drive seasonally stronger energy demand.
At 13:14 GMT, August natural gas is trading $1.779, up $0.070 or +4.10%.
Short-Term Weather Forecast
According to NatGasWeather for June 30 to July 5, “Upper high pressure will stretch from Texas to the Great Lakes and across the southern U.S. with very warm to hot highs of upper 80s to 100s, hottest in the Southwest deserts. Cooler exceptions will occur over the Northwest and New England as weather systems stall with showers and highs of 60s and 70s for locally light demand.”
“The Fourth of July weekend will remain very warm to hot over most of the U.S. with highs of upper 80s to 100s besides the far northwest and northeast U.S. Heavy showers are likely over the Southeast but very warm and humid. Overall, demand will be high going forward.”
Daily Forecast
We’re calling the weather forecasts bullish because they show the heat is likely to extend into at least July 12. It has been a while since we had reports showing extreme heat over a wide area for more than three days.
Monday’s strong rally indicates that short-sellers are taking the new forecasts seriously.
Technically, the main trend is down, but the trend will change to up on a move through $1.787. Over the near-term, upside momentum could drive the market into other tops at $1.960 and $2.053.
The short-term trading range is $2.053 to $1.517. Its 50% to 61.8% retracement zone at $1.785 to $1.848 is the first upside target. Early buyers may take profits on the first test of this area.
The main range is $2.447 to $1.517. Its retracement zone target is $1.982 to $2.092. This is our primary upside target.
Watch the price action at $1.785 to $1.787. Trader reaction to this area should set the tone on Tuesday.
Overtaking $1.787 will indicate the buying is getting stronger. This could lead to a test of $1.848. This price is the trigger point for an acceleration to the upside with the next major target $1.960 to $1.982.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
