Natural Gas Price Fundamental Daily Forecast – With Limited Weather Demand; Focus Shifts to Supply-Side

• Mild March weather pressures natural gas spot prices.
• Government report confirms supply/demand balances too loose.
• Freeport LNG facility authorized to restart final train. 

  Natural gas spot prices fell during the March 6-10 trading week, owing to mild weather and large declines on the East and West coasts.

On Friday, May Natural Gas Futures Settled at $2.559, down $0.124 or -4.62%. On Friday, the United States Natural Gas Fund ETF (UNG) settled at $8.03, down $0.21 or -2.55%.

Numerous Factors Weigh on Natural Gas Prices

Despite early indications that March would be colder than previous months, weather forecasts showed a warm trend over the following weeks, reducing heating demand. This was a negative development for investors who had hoped a colder March would prompt a rally to $3.00.

Thursday’s government storage report confirmed that supply/demand balances remain too loose, and prices likely need to fall further to bring them into better alignment.

Meanwhile, the Federal Energy Regulatory Commission authorized the Freeport LNG facility to restart its final train, which should lead to a “conservative ramp-up” over the next few weeks.

Longer-term, with inventories in the Pacific at 50% below historical levels, the market is expected to watch closely how the storage situation in the Pacific unfolds this summer.

Daily May Natural Gas Technical Analysis

The main trend is up according to the daily swing chart. A trade through $3.156 will signal a resumption of the uptrend. A move through $2.263 will change the main trend to down.

The minor range is $2.263 to $3.156. May natural gas is currently trading on the weakside of its retracement zone at $2.604 to $2.710, making it resistance.

The short-term range is $3.321 to $2.263. Its 50% level at $2.792 is resistance.

Daily May Natural Gas Technical Forecast

Trader reaction to the minor Fibonacci level at $2.604 is likely to determine the direction of the May natural gas futures contract early Monday.

Bearish Scenario

A sustained move under $2.604 will indicate the presence of sellers. If this continues to generate enough downside momentum then look for the selling to extend into $2.263 over the near-term.

Bullish Scenario

A sustained move over $2.604 will signal the presence of buyers. If this creates enough upside momentum then look for the buying to possibly extend into a pair of 50% levels at $2.710 and $2.792.

Overtaking $2.792 will indicate the buying is getting stronger with $3.156 the next likely target.