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Natural gas is on a cliff hanger - what will happen next?

Olymp Trade

Natural gas has traded in a weakly volatile uptrend since mid-February. Bulls are slowly but surely approaching the psychological level of $ 3,000 per million BTU. From a technical analysis point of view, there are no reasons to overcome this mark. The current movement range is limited by the support level of $ 2,740 and resistance of $ 2,900.

Spring is the time when bears wake up. Official spring begins on March 20, so it is still 2 weeks ahead of possible market uncertainty. At this time it is probably to expected a cold snap, which should lead to an increased gas removal from the storage. Current reserves are 22% below the five-year average and 9% below the last year average. Reuters also reports that United States had 198 degree-days last week, compared with 141 for the same week a year ago and a 30-year average of 171.

The current situation can provide an excellent opportunity to buy some gas for the summer period. At this time, it is mainly used to power air conditioners. However, such a scenario will only cause a small peak in volatility, after which long-term consolidation will begin.

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Source: https://olymptrade.com/
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