Natural gas futures are trading higher at the mid-session of the trading day, buoyed by a forecast for further storage withdrawals beyond the traditional April 1 start of the injection season.
Natural gas futures are trading higher at the mid-session of the trading day, buoyed by a forecast for further storage withdrawals beyond the traditional April 1 start of the injection season.
At 1700 GMT, June Natural Gas futures are trading $2.786, up $0.022 or +0.80%.
S&P Global Platts is reporting that only for the fourth time since 2010, gas withdrawals on a national level were reported in April, as the U.S. Energy Information Administration last week detailed a 19 Bcf drawdown from stocks in the week-ended April 6, to leave inventories at 1,335 Bcf, or 725 Bcf below the prior-year level and 375 Bcf below the five-year average.
An unusual weather pattern for early April is helping to bolster heating demand relative to historical averages. The latest National Weather Service forecast calls for below-average temperatures encompassing the fringes of the West and nearly the entire eastern two-thirds of the U.S. in the 6-10 day period.
Natgasweather.com is saying for the period April 16-22, “A strong spring storm will track across the Great Lakes and East with rain, snow, and strong thunderstorms through Monday. Behind the cold front, temperatures will be chilly with lows of teens to 30s for strong late season demand. The South will be warm with highs of 70s to 80s, although a touch cool across portions of the Southeast. The West will see a mix of mild and cool conditions as weather systems track through, but with mild breaks in between. Another weather system/cool shot will hit the Great Lakes and Northeast late in the week. Overall, demand will be high through Friday-Saturday, then easing to moderate.
Technically, the main trend is down, but a trade through the last main top at $2.810 will change the main trend to up. I don’t expect to see fresh longs entering the market on this move, but we’re likely to see a series of buy stops triggered.
The main range is $2.975 to $2.638. Its 50% to 61.8% retracement zone is $2.807 to $2.847. This area is likely to act like resistance.
The intermediate range is $2.873 to $2.660. Its retracement zone is $2.766 to $2.792. This zone is currently being tested.
The short-term range is $2.810 to $2.660. Its retracement zone is $2.753 to $2.735.
Given the current price at $2.766, resistance is $2.792, $2.807 and $2.810. The latter is the trigger point for a possible surge into $2.847.
Support lines up at $2.766, $2.753 and $2.735.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.