Natural Gas Tumbles 9% As Rail Strike Is Averted
- Natural gas markets suffer a strong sell-off after railway companies and unions reach a deal to avert a national rail strike.
- WTI oil retreats to $85 amid demand worries.
- Gold tests yearly lows as Treasury yields keep moving higher.
Natural Gas Markets Retreat
Natural gas markets suffered a strong pullback as the railway strike was averted in a last-minute deal. It should be noted that natural gas enjoyed a strong rally in recent trading sessions as traders bet that the railway strike would disrupt coal supplies and force producers to use natural gas to generate electricity.
Today’s sell-off has erased most of the recent gains. In case natural gas settles below the 50 EMA at $8.35, it will head towards the next support at the $8.00 level. A move below this level will push natural gas towards the support at the recent lows at $7.80.
On the upside, the nearest resistance level for natural gas is located at the 20 EMA at $8.65. In case natural gas manages to settle back above this level, it will head towards the next resistance at $9.00.
Today, natural gas traders also had a chance to take a look at the EIA Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by 77 Bcf from the previous week, compared to analyst consensus of 73 Bcf. EIA data served as an additional bearish catalyst for natural gas markets today.
WTI Oil Tests The $85 Level Amid Demand Worries
WTI oil moved towards the $85 level amid demand concerns. The trading action in the oil markets has been confusing in recent trading sessions.
Traders are worried about potential supply problems, but also stay focused on the slowdown of the world economy.
From a big picture point of view, WTI oil remains in a downside trend. The recent attempt to break out of this trend was not successful, and WTI oil may have a good chance to get to the test of the recent lows.
Gold Tests New Lows
Gold managed to settle below the $1680 level and tested yearly lows at $1664. Treasury yields continue to move higher, serving as the key bearish catalyst for gold that pays no interest.
Copper Settled Below $3.50
Copper declined below the $3.50 level amid a broad pullback in commodity markets.
Copper markets are sensitive to changes in economic outlook, and traders fear that higher interest rates will hurt economic activity.
In case copper traders remain focused on rising rates, copper prices will move lower.
For a look at all of today’s economic events, check out our economic calendar.