According to the recent report of the National Oceanic Atmospheric Administration, much colder than normal weather is expected to cover most of the Mid-West and North East, and warmer than average weather will cover most of the West Coast for the next 8-14 days.
Increased production last week due to imports from Canada looks supportive for natural gas bulls.
Futures look to be indecisive until the announcement of the weekly inventory, which may provide a further clue for the next directional move. Undoubtedly the weekly withdrawal should remain on the higher side of the expected level - 194 bcf this time.
Technically speaking, futures could find extreme volatility before and after the weekly inventory announcement. On the lower side, $3.888 could be strong support that may provide a sharp bounce in natural gas to keep the price above $4.242.
I find that $4 has turned into a psychological resistance again as futures showed some weakness on Tuesday and Wednesday, but the price could find a breakthrough above this psychological resistance after the announcement of the weekly inventory.
On the higher side, the price has gained enough potential to find a breakthrough above the next psychological resistance at $5 before this weekly closing or during the upcoming week to hit $5.444. Futures could see a sudden surge in case of a downward move as the national demand could remain high to very high during the upcoming weeks.
Disclaimer: The author of this analysis does not have any position in Natural Gas futures. Readers are advised to take any position at their own risk; as Natural Gas is one of the most liquid commodities of the world.