Natural Gas Fundamental Analysis, May 1, 2017

June Natural Gas futures are called steady to lower early Monday. Nothing major happened over the week-end to drive the market in either direction in a major way.

Over the short-run, investors are likely to continue to be more focused on the short-term weather pattern than the longer-term weather outlook for the summer.

Technical factors could also contribute to the direction of the market today.

The charts indicate that the trend is down according to the daily swing chart. A trade through $3.324 will turn the main trend to up and this move could get buyers excited because the next target is $3.422.

A failure to overcome $3.274 will signal the return of sellers. This could trigger a pullback into $3.200.

The major support and primary downside target is the retracement zone at $3.120 to $3.048. Last week, the upper or 50% level at $3.120 provided support when the market hit a bottom at $3.125.

Holding above $3.120 to $3.048 will also indicate that buyers are betting on a hot summer to lead to increased demand. Furthermore, these long-term investors are looking at increasing exports.

I think the direction of June Natural Gas futures today is going to be determined by trader reaction to the 50% level at $3.274.

Natgasweather.com is calling for cooler than normal temperatures over much of the Midwest and eastern U.S. later this week, while warm over the West. The net result will be slightly stronger than normal overall national natural gas demand.