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How Is Weather Impacting Demand?
Mild temperatures are keeping demand low across much of the U.S. High pressure dominates the interior, with temperatures ranging from the upper 50s to 80s, limiting heating demand, according to NatGasWeather.
The West is experiencing valley rain and mountain snow, but overall, national demand remains light. A slight uptick is expected early next week as weather systems move eastward, bringing more seasonal temperatures. However, this shift is unlikely to provide strong bullish momentum.
What to Expect From the EIA Storage Report?
Traders are closely watching the Energy Information Administration (EIA) weekly storage report for further direction. Market expectations center around a withdrawal of 50-54 Bcf, with “The Desk” survey projecting a draw of 51 Bcf, according to NatGasWeather.
Given that last week’s sample period saw above-normal temperatures across nearly the entire country, expectations lean toward a below-average storage decline. A reported draw near the lower end of estimates could reinforce bearish sentiment, especially with storage levels tracking near or above the five-year average.
Market Forecast
The short-term outlook remains bearish unless a significant technical bounce occurs. A break below $3.924 would likely accelerate selling pressure toward $3.657, a key level for bullish traders to defend. Weather-driven demand remains weak, and unless the storage report surprises with a larger-than-expected draw, natural gas futures are likely to remain under pressure.
More Information in our Economic Calendar.
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