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NG continues to slump

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Natural gas May futures opened a trading session with a gap and a drop to $2,735. The asset strengthened on Monday and the gap was closed. Apparently, the downtrend, which began on March 19, will continue. In the medium term, the current bearish trend can lead to a retest of a strong support level at $2,600 per million Btu. At the moment, most technical analysis indicators are giving signals to sell.

The fundamental background is quite neutral. On March 21, the U.S. Energy Information Administration (EIA) reported U.S. a reduction in natural gas storage facilities by 47 Bcf to 1.143 Bcf. It was just a bit smaller than the consensus forecast (-48 Bcf) and didn’t really affect the market. As a result, the inventories were both under the one-year average of 1.458 Tcf and five-year average of 1.699 Tcf.

Regarding the weather forecasts in the United States, NatGasWeather analysts suggest that US weather patterns remain relatively neutral through April 2, and then turn increasingly bearish from April 3 to April 7, due to the widespread data on normal conditions across the country. Next week, the demand for national gas fluctuate between the average price and increased one. This will probably be a local point of reversal for the market.

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Source: https://olymptrade.com/
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