Natural Gas Price Fundamental Daily Forecast – Bullish LNG Exports, EIA Report Fueling Short-Covering Rally

Natural gas futures are inching slightly higher early Friday following a strong rebound rally the previous session. The move has put the market in a position to overcome a key technical level that could trigger a short-covering spike to the upside.

On Thursday, the market was supported after a bullish weekly government storage report and steady demand for U.S. liquefied natural gas (LNG) exports offset concerns about light heating demand.

At 07:50 GMT, May natural gas futures are trading $2.640, up $0.024 or +0.92%.

Energy Information Administration Weekly Storage Report

The EIA reported a withdrawal of 36 Bcf from natural gas storage for the week ended March 19, a pull that was steeper than market expectations and the year earlier draw of 26 Bcf.

Ahead of the report, NGI reported estimates clustered around the low to mid-20s.

NGI modeled a 17 Bcf withdrawal. The median of a Bloomberg survey showed a withdrawal of 21 Bcf, with responses ranging from draws of 14 Bcf to 33 Bcf.

Reuters weekly poll found pull estimates from 16 Bcf to 41 Bcf, with a median decrease of 25 Bcf. Respondents to a Wall Street Journal survey reported withdrawal estimates that spanned 14 Bcf to 33 Bcf and averaged 26 Bcf.

According to Natural Gas Intelligence (NGI), LNG feed gas volumes hovered close to 11.6 Bcf on Thursday, according to NGI estimates, not far from record levels reached earlier in the month and on par with the previous day. Demand for U.S. exports mounted this month after European supplies dwindled over the winter.

Blocked Suez Canal Raises Supply Issues

Data intelligence firm Kpler said tankers were backing up, and an estimated 15 LNG vessels with planned transits would likely be affected. Some delayed LNG vessels were destined for Europe and others for Asia. The potential for delays could put upward pressure on prices, analysts said.

Daily Forecast

The next move will be determined by whether traders decide to follow the bullish LNG news or the bearish weather outlook.

Customary spring maintenance work could eat into LNG levels temporarily in coming weeks, analysts said depleted supplies in Europe likely will drive ongoing demand for U.S. exports into the summer months, NGI reported.

Meanwhile, weather-driven demand looks “quite low, overall, the next few weeks,” Bespoke said.

originalWidth=1920 ratio=1.99]Daily May Natural Gas

Technically, the main trend is down. A trade through $2.750 will change the main trend to up. A move through $2.459 will signal a resumption of the downtrend.

The main range is $2.352 to $3.060. Its retracement zone at $2.622 to $2.706 is controlling the near-term direction of the market.

A sustained move over $2.622 will indicate the presence of buyers. If this creates enough upside momentum then look for a possible surge into $2.706.