We expect natural gas to rise during its upcoming trading, as long as the support 4.954 remains, to target the pivotal resistance level 6.412.
Spot natural gas prices (CFDS ON NATURAL GAS) declined during the recent trading at the intraday levels, to record daily losses until the moment of writing this report, by -3.95% to settle at the price of $5.394 per million British thermal units, after rising in yesterday’s trading by 10.73% .
Natural gas futures rose as US winter storms intensified and boosted expectations for fuel demand. Natural gas for the month of March, NGH22, settled at $5.501 per million British thermal units, an increase of 15.8%.
Freezing temperatures and snow are expected to stabilize in parts of the Northeast, Midwest, and Southern United States over the weekend. Although frigid conditions in Texas threaten to cause a freeze at oil and gas production sites, which could reduce supply again, similar to what happened in early January this year and February last year.
The Energy Information Administration is expected to report a weekly decline in US natural gas inventories well above the five-year average. On average, analysts expect a decrease of 274 billion cubic feet, according to a survey by Standard & Poor’s Global Platts, which pegged the average five-year supply decline for this period at 150 billion cubic feet.
Technically, the price is trying with its early decline to reap the profits of its previous highs in the short term, and to try to gain positive momentum that might help it recover and rise again. Additionally, it is trying to drain some of its clear overbought by the relative strength indicators, especially with the start of the negative crossover with the relative strength indicators.
This comes in light of the dominance of the main bullish trend in the medium term. It was affected by the exit from the range of a bearish corrective price channel that had limited its previous trading in the short term. This is shown in the attached chart for a (daily) period, supported by its trading above its simple moving average for the previous 50 days.
We expect natural gas to rise during its upcoming trading, as long as the support 4.954 remains, to target the pivotal resistance level 6.412.
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