Natural gas futures gapped higher on the daily and weekly charts on Tuesday after colder weather patterns for late February into early March held over the weekend. NatGasWeather said “This makes the back end of the 15-day forecast cold weighted, aided by further colder trends.” The current forecasts are calling for “cold air pushing into the U.S. around February 28-29, plenty cold enough to satisfy as long as it doesn’t back off in time,” according to the forecaster.
At 13:24 GMT, April natural gas futures are trading at $1.942, up 0.086 or +4.63%.
Short-Term Weather Outlook
According to NatGasWeather for February 18 -24, “A mild break will continue across the South and East today with highs of 40s to 70s. However, a strong cold shot will sweep across the northern U.S. Wednesday through Saturday with lows of -0s to 20s returning across the Midwest and Northeast for strong national demand. The West will see a mix of mild and cool weather systems. High pressure will build across much of the U.S. late this weekend into next week with temperatures warming into the 30s to 50s across the northern U.S, while remaining comfortable across the southern U.S. with 50s to 80s for a swing back to light national demand.”
U.S. Energy Information Weekly Storage Report
On Thursday, the EIA reported a 115 Bcf withdrawal from storage for the week-ending February 7. This was a little on the bullish side of the estimates, but since it was old news, it didn’t have much of an effect on prices.
The reported draw was above last year’s 101 Bcf figure, but below the five-year average draw of 131 Bcf.
Total working gas in underground storage stood at 2,494 Bcf as of February 7, 601 Bcf higher than year-ago stocks and 215 Bcf higher than the five-year average, according to EIA.
The minor trend turned up on the daily chart on Tuesday. This shifted momentum to the upside.
The main range is $2.196 to $1.788. Its retracement zone at $1.992 to $2.040 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this zone.
Overtaking $2.040 will indicate the buying is getting stronger. This may be the first sign of the massive short-covering rally that aggressive counter-trend buyers have been anticipating for weeks.
This article was originally posted on FX Empire
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