Natural gas futures are trading lower on Monday as downside momentum threatens to challenge last week’s low amid mild weather forecasts and warnings of a possible triple digit injection in this week’s government storage report.
At 10:10 GMT, May Natural Gas futures are trading $2.609, down $0.052.
Downside momentum on the daily chart has put the June natural gas futures contract in a position to take out the last main bottom at $2.675. This will reaffirm the downtrend and put the market in a position to challenge the February 7 main bottom at $2.647, followed by the low for the calendar year at $2.623.
From a longer-term perspective, taking out $2.686 will also put the market on the weak side of a weekly retracement zone. This will put the market in a bearish position.
Expectations of increasing injections could be driving the price action today. “Continued loose balances point to another hefty injection versus the five-year average next week as well,” according to Bespoke.
Last week, Tudor, Pickering, Holt & Co. said there was a potential for the EIA to report a 100 Bcf-plus build, which would be five times the five-year average. Most analysts, however, are estimating a build closer to around 90 Bcf.