Natural Gas Price Fundamental Daily Forecast Gapped Lower after Weather Models Trended Lower

Natural gas prices are a function of market supply and demand. Increases in natural gas supply generally result in lower natural gas prices, and decreases in supply tend to lead to higher prices.

A “very bearish” pattern was predicted by two weather models for this week through December 15.

Following an overnight gap lower on the daily and weekly charts, natural gas futures are falling sharply today. The significant selling pressure is being caused by weather predictions that are projected to lower heading demand for the first half of December.

Natural gas futures for January are currently trading at $5.652, down $0.629 or -10.01%, as of 18:00 GMT. At $17.28, down $1.80 or -9.43%, the United States Natural Gas Fund ETF (UNG) is in the red.

The “Quite Bearish” Pattern is identified by NatGasWeather.

According to NatGasWeather, two weather models showed a tendency toward warming over the weekend, with the American model showing a “huge” reduction of 23 heating degree days.

For this week through December 15, both models predicted a “very bearish” pattern with “far warmer than average temperatures spanning the southern and eastern U.S. most days,” according to NatGasWeather.

Mixed Predictions for December 16–20

According to NatGasWeather, the weekend statistics did point to the probability of lower weather and higher national demand for the period between Dec. 16 and 20.

However, according to NatGasWeather, “the meteorological data had previously predicted a chilly U.S. pattern” for the first week of December, “only to trend considerably milder.” The weather data then predicted a cold pattern for the second week of December, only for it to significantly back off.

Market players will therefore probably view the projected cold for December 16–20 with suspicion for the time being, according to NatGasWeather.