Natural Gas Price Prediction – Test Of Support At $6.00
Key Insights
Natural gas markets found themselves under pressure after the release of the EIA data.
The increase of working gas in storage exceeded analyst expectations, and natural gas prices declined towards the $6.00 level.
A successful test of the support at $6.00 will push natural gas towards the next support level at $5.80.
EIA Report Pushes Natural Gas Prices To New Lows
Natural gas prices moved towards the $6.00 level after EIA released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage increased by 82 Bcf from the previous week, compared to analyst consensus of 74 Bcf.
The report has immediately served as a bearish catalyst for natural gas markets. Working gas in storage is growing faster than expected as the problems at Freeport LNG increased supply to domestic markets.
While all market participants are well aware of the situation at Freeport LNG, it looks that analysts are underestimating the impact of these problems. As a result, working gas in storage is growing faster than expected, and natural gas markets remain in a strong downside trend.
Technical Picture Remains Bearish
Natural gas settled below the support at $6.20 and is testing the next support level at $6.00. If this test is successful, natural gas will move towards the support level, which is located at $5.80.
A move below the support at $5.80 will open the way to the test of the support at $5.60. If natural gas declines below this level, it will head towards the support at $5.45.
On the upside, the previous support level at $6.20 will serve as the first resistance level for natural gas. If natural gas manages to settle back above this level, it will move towards the next resistance at $6.50. A successful test of the resistance at $6.50 will push natural gas towards the resistance at $6.75.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
