Natural gas – call points
- Natural gas prices are higher than the United States average braces at cold speeds
- Prices are at their highest level since the beginning of March, with a weekly rise of almost 2.5%
- The technical outlook for natural gas has improved, but the bullish narrative is uncertain
The unusual cold season in the late season, which is expected to pass through the central United States, is driving up natural gas prices. Heating gas is on the rise for the second week in a row, with prices almost 2.5% higher than increased demand expectations due to the coming cold weather. The National Weather Service (NWS) predicts a winter storm in which heavy snow will gather from Colorado to Ohio.
The State Weather Service predicted snowfall and temperatures
Source: National Weather Service (NWS)
Natural gas demand usually decreases in spring due to the warming temperatures of April and May. This weather system violates this seasonal pattern, which is likely to be reflected in next week’s Energy Information Agency (EIA) weekly report on natural gas storage. This week’s EIA release will show data for the week ending April 16th.
According to the EIA, the level of stocks fell below the five-year average at the beginning of this year, but has started to look higher again, which is a typical seasonal factor. If the storage volume is on a historical average trend, the price depends more on demand-side variables. Given that prices have risen so far, further increases may not be higher, as the price is likely to reflect the impact of events on demand.
Natural gas technical forecast
The technical situation of natural gas has improved dramatically since the last two weeks, rising to over 50 and 100 days Simple moving averages (SMA). The MACD oscillator is up and recently crossed above its signal line, which is a bullish sign. Crossing the September trend line would restore the narrative of the wider bull. A 78.6% Fibonacci level may provide resistance to the rise. Alternatively, support for trend lines (green line on the chart) may support prices during downturns.
Natural gas daily card
The chart has been created TradingView
Natural gas trading resources
– Written by DailyFX.com analyst Thomas Westwater
To contact Thomas, use the comments section below or @FxWestwaterTwitter