NATGAS price in the US is rising more than 10% today and is breaking through important resistance levels. Initially, price broke above the downward trend line and is testing an important resistance area which is marked with the 100 session average and 38.2% Fibonacci retrenchment of the recent upward wave.
The upward move is caused by several factors. First of all, a risk of a snowstorm in the North East of the United States appeared, which is likely to lead to an abrupt increase in demand. On the other hand, recent inventory data showed standard gas consumption. Only in a week's time will we receive another confirmation.
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Create account Try a demo Download mobile app Download mobile appNevertheless, one of the key factors is the expiration of the February gas futures contract. February gas prices rose by over 70% yesterday! Prices, however, ultimately reduced their gains for the February contract. On the other hand, the March contract (which we are currently operating) recorded nearly a 10% increase.
Prices rose sharply in the last 2 sessions, which is mainly related to the weather in the US, although at the same time one should also bear in mind the conflict between Russia and Ukraine, which may potentially significantly increase the demand for LNG from the US. It is worth noting that in recent weeks, fund managers have become net buyers of gas (although all non-commercial investors are still net negative). The upside potential in the short term may be limited by the upper bollinger band and the deviation from it at the level of 5-10%, which happened in the past year. At the same time, however, it is worth remembering that if the threats to gas supplies in Europe abate, prices should return to lower levels in the longer term due to the end of the heating season. Of course, it cannot be ruled out that the harsh winter conditions will prevail for longer, although experts from the US do not expect such a scenario.
NATGAS, D1 interval. Source: xStation5
