Will Natural Gas Find Support on Forecasts of Warmer US Term?

Will Natural Gas Find Support on Forecasts of Warmer US Term?

Natural gas prices recovered from yesterday’s lows for the week and closed modestly higher.

The short coverage has pushed up prices as heat is forecast for much of the United States, boosting demand for gas from air conditioning suppliers.

The Commodity Weather Group reported that between March 2 and 8, forecasts of warmer weather spread across much of the country, especially along the East Coast and much of the central United States. until June of.

In addition, the National Weather Service said that “the vast majority of the lower 48 US states could see above-average temperatures for the next three months, and for a good portion of states, a hotter-than-normal summer is the most likely scenario.”

 Prices have rebounded higher to an over four-month high last week from the three and half year nearest-futures low posted on April 26. Gas prices collapsed over the winter and early spring after unusually mild winter temperatures curbed heating demand and pushed inventories well above average.

However, prices saw some pressure after the Freeport LNG export terminal in Texas on March 1 shut down one of its three production units due to damage from extreme cold in Texas. The unit recently reopened on a partial basis.

However, Freeport said that once the production unit is fully reopened, the other two units will be taken down for maintenance, and all three units will not return online until late May. The lack of full capacity of the Freeport export terminal limits US exports and boosts US  gas inventories.

Technical Outlook : Natural Gas Futures

Natural gas prices rebounded from the day’s low 207.20 and settled at 214.50, higher by 1.80%. Prices pause their fall from the low 205, since Monday.

On the above chart, prices found strong support above 202.50 and formed a long bullish candle stick. Adding to this, prices trading above the short-term moving average. Both of which are indicating for bullishness in near future.

On the upside, immediate resistance is seen at 218.50 above it 225-235.00. on the downside, support is seen at 202.50 below it 192-185.00

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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