U.S. natural gas prices finished marginally lower on Wednesday as investors reacted to technical chart levels, mild temperatures and worries over this week’s storage numbers.
December Natural Gas settled at $3.066, down 0.005 or -0.16%.
According to natgasweather.com, “Temperatures across the U.S. the next 7-days will be warmer than normal over the eastern half of the country, while just slightly warm over the central and southern U.S. There will still be weather systems bringing showers, such as the one tracking across the Ohio Valley, just none very cold. The West will see a bit colder weather systems arrive. Overall, demand will be near normal due to the relatively mild Great Lakes and Northeast for this time of the year.”
On Thursday, the U.S. Energy Information Administration’s weekly storage report is expected to show a build of 74 billion cubic feet. Last week’s build was 42 bcf.
Wednesday’s price action indicates that the key resistance area is $3.090 to $3.108. If buyers can overcome this area then the rally is likely to extend into another technical retracement zone at $3.183 to $3.223.
Short-term support is $3.073 to $3.059. If this area fails as support then the market should retest $3.013.
According to Reuters, U.S. natural gas storage is expected to end the April-October injection season at a below-normal 3.799 trillion cubic feet (tcf) at the end of October. That compares with a five-year (2012-16) average of 3.861 tcf and falls well short of last year’s record high of 4.022 tcf at the end of the injection season.
This tells me that bullish investors just have to be patient and wait for the weather to turn cold.
This article was originally posted on FX Empire
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