Nat Gas Spikes
Natural Gas prices are ending the week firmly higher after the futures market surged higher by almost 9% yesterday. The market is now up more than 16% off last week’s lows as the recovery gathers pace. While still down sharply on the month, colder temperatures in the US and a rally in European gas prices have helped lift the US market this week. Indeed, the move higher comes despite ongoing strength in the US Dollar which has rallied again this week on a less dovish Fed outlook and increased market pricing for a Trump elections win.
Euro Gas Rally Trumps Inventories Rise
The rally in Nat Gas this week comes despite a bearish report from the EIA. The group posted Nat gas inventories of +80bcf last week, well above the +68bcf the market was looking for and above the 5-year seasonal average of +76bcf. Despite this, it seems the focus for now is on the shift in weather and the expectation that will demand will soon rise. Additionally, a rise in European gas prices has been highly beneficial. The European market has been rallying on expectations of exclusive demand from China and India, with this rice impact spilling over into the US this week. Looking ahead, prices look set to continue higher if the cold weather system forecast in the US materialise.
Technical Views
Nat Gas
The sell off in NG has stalled for now into a test of the 2.307 level, which is holding as support. While this level holds, focus is on a fresh push higher and a test of the 3.139 level next (with the bear trend line just ahead). Downside, 1.525 is next support to note if we break lower.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.