US natural gas prices (NATGAS) halted a recent downward move in the 6.70 area, marked with the lower limit of the Overbalance structure. An explosion at a key US LNG terminal helped ease the situation on the market as it means less gas will be exported abroad and more will remain at home. However, outlook for US natural gas prices in the long-term is bullish as the United States signed a number of long-term supply agreements. The aforementioned 6.70 mark also serves the upper limit of a support zone ranging around 50% retracement of the latest upward impulse. This means that further drop would require a break below a key support and it may require some kind of a catalyst. Today's release of EIA data on natural gas storage change (3:30 pm BST) could be such a catalyst. A big build in inventories could help bears push through the support zone near 50% retracement. On the other hand, should the data show lower than expected build or a drop, NATGAS may catch a bid. Note that this would mean rebounding from the lower limit of the Overbalance structure what in theory would hint that uptrend was maintained.
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