US natural gas erases part of weekly gains amid higher U.S. storage and uncertainty caused by PPI inflation reading📉
The last trading session of the week brings a deterioration in market sentiment, which also does not escape the quotations of NATGAS, which today drops more than 2.5%, thus erasing a significant part of the weekly move upside. Today's reading of the U.S. PPI report for July surprised to the upside, which worried the market about a possible extension of the interest rate hike cycle, which could ultimately lead to a more permanent recession in the economy, which of course negatively affects commodity prices.
The second factor triggering declines in NATGAS quotes is yesterday's report on weekly changes in US natural gas inventories. The reading came in above expectations, which somewhat neutralized the overtones of the ongoing heat wave in the United States, where natural gas is being consumed en masse and converted into electricity to power air conditioning in households.
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NATGAS is currently testing the support set by the 100-day exponential moving average (purple curve). Source: xStation 5
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