Natural Gas futures price prediction – Prices face strong resistance

Natural gas prices rallied around 6% on Tuesday breaking all minor resistance. The November contract of Natural Gas closed at 191 while the other two contracts which are prices at gap followed the trend.  Despite strong rally early this week, natural gas prices couldn’t break the upper resistance and short sellers enter the market.

Natural Gas prices

Short term weather forecast

Bespoke weather forecast both the American and European data were colder than where they stood the previous 24 hours. They also said the American ensemble data remained much colder versus the European models. Both the data are pointing in colder direction. This obviously is expected during this time of the year.

NatGasWeather said the midday data was relatively unchanged with the Global Forecast System (GFS) only giving back one to two heating degree days.

While the current cold snaps have given support to the prices, both models suggest milder weather pattern around the middle pattern around the middle of the month.

As per the Bespoke weather, weather will obviously be favorable to the prices and we can expect national demand to rise in coming weeks.

Natural Gas EIA storage report

With release of Natural Gas EIA report released on today, we saw prices under pressure and short sellers entering the market.

Natural gas market couldn’t break the resistance. We can expect prices to trade around $2.60. We can expect market to trade in a short term range until the cold weather hits. Consider any drop as a buying opportunity.

Bloomberg survey of 13 analysts showed a median build of 85 Bcf. Reuters had a range from 66 Bcf to 94 Bcf, with a median of 85 Bcf. Natural Gas Intelligence (NGI) projected a 93 Bcf injection.

Working gas in storage was 3,695 Bcf as of Friday, October 25, 2019, according to EIA estimates. This represents a net increase of 89 Bcf from the previous week. This report comes as a support to the sellers but with weather reports support the prices, we can expect prices to trade in range.

This also means that we can expect quite volatile market.

Natural gas price forecast

With short cold snaps and enough storage, prices are expected to be more volatile. It seems like prices will move based on traders’ reaction to the recent released EIA report.
I am expecting that the market will be volatile but every dip is a buying opportunity. We can expect another rally happening soon and Novembers prices could surge to 205-210.

Trading tip – Buy Natural Gas at every dip. Prices can be seen trading at 185 tomorrow and this can be a good buying opportunity.

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