Natural Gas at Crossroads in East-West Heat Battle
Call it the yin and yang of natural gas.
As New York and Eastern U.S. temperatures soar into the 90s Fahrenheit in the first heatwave of the summer, scorching conditions in Texas and the Southern states are subsiding after increased cloud cover and showers over the July 4th holiday stretch.
That has left gas prices at a crossroads, with the path of least resistance looking lower in the immediate term, as the market loses its chutzpah of the past four weeks to head for its first weekly loss since.
Most-active August gas on the New York Mercantile Exchange’s Henry Hub was exposed to a 6% loss on the week, after a near 30% rally over the past month. After last Monday’s three-month high of $2.936 per mmBtu, or million metric British thermal units, the front-month gas contract has been capped at a mid-$2 to sub-$2.70 range.
Said Sunil Kumar Dixit, chief technical strategist at SKCharting.com:
“If selling intensifies, expect some more losses towards 100 Day SMA, or Simple Moving Average of $2.38.
But in the event of a rebound, momentum accumulation from support areas should bring the front-month quickly back towards $2.66, with the next swing target of $2.839.”
Rhett Milne of NatGasWeather.com puts it in perspective as traders await the weekly gas storage report from the U.S. Energy Information Administration, or EIA, due this Friday instead of Thursday owing to the holiday.
U.S. utilities likely added a near-normal 64 bcf, or billion cubic feet, of gas to storage last week, according to industry analysts tracked by Investing.com. That was barely different from the 63-bcf injection during the same week a year ago and a five-year (2018-2022) average increase of 64 bcf. In the prior week, utilities added 76 bcf to storage.
Says
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