Natural Gas Gains Ground Ahead Of The EIA Report
- Natural gas is moving higher while traders wait for the release of the EIA report.
- The weather forecast remains unfavorable for high natural gas consumption.
- A move above the resistance at $7.20 will push natural gas towards the 20 EMA at $7.35.
Natural Gas Continues To Rebound
Natural gas prices continue to rebound ahead of the EIA report, which is expected to show that working gas in storage increased by 113 Bcf.
Interestingly, traders look ready to ignore rising inventories and are pushing natural gas prices towards recent highs. It should be noted that the weather forecast remains unfavorable for high natural gas demand.
In Europe, natural gas prices rebound despite resumption of Russian gas exports to Italy. Prices have been moving lower in recent weeks as demand for natural gas declined due to factory closures. However, demand should pick up relatively soon as temperatures get colder and the heating season begins.
In the U.S., the EIA report will determine natural gas price dynamics. At this point, it looks that the market is comfortable with the above-mentioned analyst consensus, which expects a build of 113 Bcf. However, natural gas prices may find themselves under significant pressure if the actual build is closer to the 120 Bcf level.
Natural Gas Must Settle Above $7.20 To Have A Chance To Gain Sustainable Upside Momentum
Natural gas managed to get above the $7.00 level and is moving towards the next resistance, which is located at $7.20. In case natural gas manages to settle above this level, it will head towards the next resistance, which is located at $7.35. A successful test of this level will push natural gas towards the resistance at $7.50.
On the support side, the previous resistance level at $6.90 will serve as the first support level for natural gas. If natural gas declines below this level, it will move towards the next support at $6.75. A move below the support at $6.75 will open the way to the test of the support at $6.55.
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