U.S. natural gas (NATGAS)-based futures are gaining nearly 3% today on higher temperature forecasts that could drive demand for electricity generated by burning gas to fuel air conditioning. Moreover, weak year-on-year production data and lower-than-expected inventories have undercut sentiment of an oversupplied market after an unusually mild winter that decimated demand.
Demand for natural gas in the continental U.S. zone is now climbing above a five-year trading range showing the seasonality of demand for the commodity.
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Early hot weather in Texas further bolstered upward movements in contracts. Source: Bloomberg Financial LP
NATGAS is trading at its highest levels since the beginning of the second half of January this year. The most important support point in the short term all the time may remain the 200-day EMA (gold curve on the chart). If the increases continue, the $3 zone could be an interesting test point for the buyers' side.
Source: xStation
