Natural gas futures are trading lower shortly after the regular session opening on Wednesday as the 11 to 15 day forecast continues to flip-flop between warmer and colder temperatures. However, there are some who refuse to sell, remembering last year’s surprise cold temperatures that sent prices skyrocketing into the first week of November.
At 12:16 GMT, November natural gas futures are trading $2.280, down 0.008 or -0.35%.
“…What the natural gas markets are likely to notice most is the added demand October 16-18 as a reinforcing cool shot follows to keep conditions a touch chilly across the Midwest and Northeast,” NatGasWeather said.
The forecaster went on to note, “The pattern would be more intimidating if not for most datasets favoring temperatures warming across the eastern half of the country October 19-23. However, the October 18-23 period is subject to colder trends in time and needs watching.”
Rising spot prices are also underpinning prices as the second in a series of cold fronts made its way into the southern United States. Furthermore, we’re seeing a drop in volume ahead of Thursday’s U.S. Energy Information Administration (EIA) weekly storage report.
Short-Term Weather Outlook (7 Day)
According to NatGasWeather for October 9 to October 15, “High pressure will build across the Midwest and Northeast Wednesday through Thursday with highs of 60s and 70s. A strong weather system will bring rain and snow to the Rockies and Plains the next couple days with lows of 10s to 30s, then tracking across the Midwest and Northeast this weekend with lows of 30s & 40s. The southern US from Texas to the Southeast will warm with highs of 70s & 80s, besides locally 90s. A reinforcing cool shot will follow mid-week across the northern US to keep conditions a touch chilly. Overall, light demand the next couple days then stronger Friday through mid-next week.”
Until traders gain confidence in the 11 to 15 day forecast, we’re likely to continue to monitor around the pivot at $2.302. Yesterday, the market spent most of the day on the weak side of this level. Earlier today, the market touched this level then broke lower.
The early price action indicates that the direction of the November natural gas market on Wednesday is likely to be determined by trader reaction to $2.302.
The early weakness may be indicating the emergence of a more bearish 11 to 15 day forecast.
This article was originally posted on FX Empire
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