Natural gas markets have initially tried to rally during the trading session on Wednesday but have pulled back just a bit to show signs of softness. It makes a bit of sense though, considering that Thursday will feature Natural Gas Storage figures out of the United States, giving us an idea as to what the demand for natural gas is. Recently, we have had a couple of major snowstorms break out in the United States, and that of course will drive up the demand for natural gas. Beyond that, temperatures have also drop dramatically, and that of course will drive up demand for heating.
NATGAS Video 05.12.19
That being said, the 50 day EMA above painted in red is going to cause a bit of resistance. That is currently at the $2.517 level. Once we break above there, then the 200 day EMA is at the $2.562 level. In other words, there is a lot of resistance above, but this is the time year that we should be able to break through that. If the inventory number end up being very bullish, then the market should continue to go higher. That being the case, I believe that the market will then eventually target the $3.00 level, and beyond. This is the time a year where demand picks up drastically and supply drops typically. Having said that, there was a massive amount of drilling in the United States this year, so it is a bit more sluggish than usual. That being said though, we are probably only a couple of major storms away from seeing that huge spike we normally get.
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This article was originally posted on FX Empire