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A sustained move above $4.020 would signal the presence of buyers, with the next upside target identified at a minor pivot of $4.169. Successfully clearing this hurdle could open the door to further gains, with potential targets set at $4.442 and $4.476. However, a failure to breach $4.169 could reinvigorate selling pressure, potentially dragging prices back toward $3.862.
If bearish momentum takes over, traders should watch for a retest of the major pivot at $3.733, which serves as a gateway to the 50-day moving average at $3.357. A break below this moving average could shift sentiment decisively bearish, prompting further downside exploration.
Weather and Demand Remain Key Influencers
March Nymex natural gas futures found some stability on Tuesday as traders positioned themselves ahead of the contract’s rolloff. Support also came from slightly cooler weather forecasts for the upcoming weekend. However, overall weather trends remain a challenge for bulls, with forecasts indicating warmer-than-normal temperatures across much of the U.S. from March 11 to 14.
According to NatGasWeather, national demand is expected to remain very light through Friday, only increasing to moderate levels on Sunday and Monday before easing again. This tepid demand outlook is driven by ideal temperatures ranging from the 60s to 80s in the southern U.S. and mild to cool conditions in the north.
Supply and Exports Hold Steady
Supply and export data paint a mixed picture for natural gas. Output remains robust at around 104 Bcf/d, while demand in the Lower 48 sits below 90 Bcf/d. Liquefied natural gas (LNG) exports continue to provide support, staying strong at over 16 Bcf/d. While healthy export levels are a positive factor, weak domestic demand amid mild weather could counterbalance this support.
Will Natural Gas Maintain Bullish Momentum?
The short-term outlook for natural gas futures remains mixed. A bullish scenario hinges on a decisive move above $4.169, which could pave the way for further gains toward $4.442 and beyond. However, if sellers regain control and push prices below $4.020, the market could retest $3.862 and potentially head towards the critical $3.733 pivot.
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