Natural Gas Technical Analysis: Price Catches its Breath

Spot natural gas prices (CFDS ON NATURAL GAS) settled on a rise in its recent trading at intraday levels, to achieve slight daily gains until the moment of writing this report, by 0.13%. It settled at the price of $9,300 per million British thermal units, after rising slightly during yesterday’s trading by It reached 0.15%.

In a quieter session on Tuesday, natural gas futures failed to sustain early gains as traders took profits. Gas futures for July settled at $9.293 per million British thermal units, compared to 2.9 cents a day. The August futures contract fell by 2.8 cents to $9.278.

NGI’s Spot Gas National Avg spot gas prices have moved higher again, with temperatures rising across Texas in the US and much of the South.

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Long-term forecasts from the US National Weather Service expect most of the country to see normal temperatures or above seasonal temperatures for the six to 14-day forecast period, driving up demand for cooling.

At the same time, production was struggling to break free from the low range into the mid-1990s, and analysts said nearly 97 billion cubic feet per day was needed to start easing the pressure.

Record gas demand during the winter season led to the largest drop in storage stocks in the past four years, according to the US Energy Information Administration (EIA). Net withdrawals were 2.264 billion cubic feet in the November-March period, leaving inventories at 1,401 billion cubic feet. Although this was well below last year’s levels and the five-year average, the EIA said stocks were 11 billion cubic feet higher than in March 2018.

Technically, the price stops a little during a short break in which to reap its profits, and not to gather its positive forces that may help it recover and rise again. This comes from the dominance of the main bullish trend in the medium and short term along a slope line, as shown in the attached chart for a period of time (daily). The continuation of the positive support for its trading above its simple moving average for the previous 50 days, has the influx of positive signals on the relative strength indicators.

Therefore, our positive expectations remain as they are. We expect natural gas to rise during its upcoming trading, as long as it remains above the support level 8.870, to target the first near resistance levels at 9.550.