US natural gas prices continue to move higher, raising cost concerns. The increases are mainly caused by growing LNG exports, which causes a decrease in inventories compared to the 5-year average. Recent data indicate that US gas stocks are just under 20% below the 5-year average. Interestingly, inventories may decline further due to expected cold temperatures in April, which would delay the recovery process. Usually, the heating season ends in April and the process of rebuilding gas reserves begins.
US inventories fell significantly below the 5-year average. Source: EIA
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Gas prices jumped above local 2011 highs and 38.2% Fibonacci retracement. It is worth noting that in the past, the level around $ 6 MMBTU acted as a major supply zone. Should the price stay above $ 6.5, the bulls could attack resistance around $ 7.5 which coincides with 50.0% retracement. It is worth mentioning that investors have been increasing their long speculative positions in recent weeks. Source: xStation5
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