US natural gas prices have been trading sideways since the beginning of February. Bulls attempted to break above the upper limit of the trading range in the 2.60 area on Tuesday but failed and a pullback was triggered. Price found support in the 2.43 area and an over-4% rally has taken place in the past few hours. The EIA report on natural gas inventories is released to watch for NATGAS traders today. It is expected to show much smaller inventory draw (-97 bcf) than in the previous week (-217 bcf). Such low expectations can be reasoned with the fact that the United States enjoyed relatively high temperatures. Moreover, the report will not yet capture the impact of Freeport LNG terminal resuming operations. Nevertheless, some short-term volatility is to be expected around release time.
Taking a look at NATGAS chart we can see that the price is currently trading near the midpoint of the trading range. Weather conditions are expected to deteriorate in the next 8-14 days with temperatures in key heating regions dropping. This combined with resumption of exports at Freeport LNG terminal may provide some upward pressure on NATGAS prices going forward.
Source: xStation5
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