New sanctions and cold weather in the US boost NATGAS demand
Natural gas futures jumped to $6.50 which is the highest level since November 2008 as expected impact of additional sanctions on Russia lifted demand prospects. EU members decided to implement a ban on coal imports from Russia (albeit only from August due to Germany opposition) and pledged to start working on an embargo on Russian oil, gas and nuclear fuel, putting additional pressure on energy markets. Transports of LNG to Europe from US reached record levels while EIA report showed that US natural gas stockpiles dropped by 33 bcf well above market estimates, due low temperatures which prevailed at the end of March. This means utilities will start their storage injection season with inventory levels 17.1%. Additionally recent weather forecasts also showed that colder weather may prevail in some parts of the US until the middle of this month, therefore heating demand could remain elevated.
NATGAS price rose nearly 15% this week and broke above major resistance at $6.20 which coincides with 38.2% Fibonacci retracement of the last downward correction launched in 2008. Should current sentiment prevail, the next target for buyers is located at $7.60. Source: xStation5
