Natural Gas News: Cooler Forecast and Storage Surplus Pressure Futures

Friday’s trading range was wide, but February natural gas opened and settled near $3.904 after an intraday surge to $3.983 failed to hold. The long upper shadow shows sellers stepped in after the market crossed the 50-day moving average at $3.962.

The new short-term retracement zone is $3.723 to $3.983. Its retracement zone at $3.853 to $3.822 is the nearest downside target. On a test of this zone, new buyers are going to try to create a secondary higher bottom. Sellers are going to try to produce a new lower main top at $3.983 by driving prices through this retracement zone and towards the $3.723 main bottom.

What to Watch

The next weather updates decide whether nearby gas stabilizes or breaks the bottom of the range. Bulls need the heat to strengthen and spread east. Sellers need the cooler breaks to keep returning across the highest-population demand regions. The storage surplus gives sellers the edge on every rally attempt and production above 111 Bcf per day is not helping the bulls.

February is the contract to watch for a different signal. The prompt months are trading loose supply. The winter contract is trading uncertainty and as long as it holds up better than August and September, the curve is telling you the market has not given up on the possibility that the winter story changes before the heating season arrives.

More Information in our Economic Calendar.