NATURAL GAS BREAKTHROUGH TRIPPLE TOP. AND NOW WHAT?
Natural gas breakthrough the triple top on a weekly basis, but now the price stays on the strong resistance 61.8 Fibonacci level. It is a turning point, and it would be interesting how the price will react this week. The weather appears to be the driving factor behind the recent upward movement in natural gas prices. Exports are on the rise, and industrial activity is returning. Still, the current weather pattern for much hotter than typical weather coming out of the North West is driving up the demand for natural gas turbines electricity. Natural gas futures look stable in the long term. If the natural gas prices continue to rise sharply for the subsequent consecutive trading sessions and breakthrough 61.8 Fibo level, the next strong resistance level on a weekly basis is very far on the north at prices around 4.90. If the price levels will pull back from 61.8 Fibo, it is possible to test the previous support levels at 38.2 and 23.6 at prices around 2.80 and 2.30 per cubic feet. Our oscillator indicators show that the price is in the overbought zone above the 80 RSI level.
Meanwhile, revived export demand is likely to tighten balances even further as the U.S. approaches peak cooling season. The latest EIA report confirmed the more robust demand with a modest 55 Bcf injection into storage. Total working gas in storage as of June 18 stood at 2,482 Bcf, which is 513 Bcf below last year and 154 Bcf below the five-year average, according to the EIA.
Meanwhile, revived export demand is likely to tighten balances even further as the U.S. approaches peak cooling season. The latest EIA report confirmed the more robust demand with a modest 55 Bcf injection into storage. Total working gas in storage as of June 18 stood at 2,482 Bcf, which is 513 Bcf below last year and 154 Bcf below the five-year average, according to the EIA.
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