Spot natural gas prices (CFDS ON NATURAL GAS) rose during the recent trading at the intraday levels. It achieved new daily gains until the moment of writing this report, by 4.01%, to settle at the price of $5.107 per million British thermal units. This will make it be on the right track to record gains for the seventh day. Respectively, after it advanced in trading on Friday by 7.94%, during the past week, spot contracts for natural gas rose by 23.49%.
Natural gas prices settled firmly in positive territory, as forecasters warned of a major winter storm expected to form along the US East Coast over the weekend. Spot natural gas prices have risen every week so far in 2022.
Meanwhile, the Nymex contract for February rose throughout the week and settled at $6,265 per million British thermal units on Thursday. This is driven by a large drop in inventories and a massive rush in buying to expiration, up 57% from the previous week's close.
Forecasters expected strong weather-driven demand next week, a potential catalyst for spot prices.
Natural gas futures posted their biggest one-day percentage gain ever on Thursday, up more than 46% as the rally was triggered by the expiration of February contracts, and a "classic" short squeeze as a winter storm approached in the Northeast.
Technically, the price managed in its recent trading to breach the important resistance level 4.740, driven by the continuous positive support for its trades above its simple moving average for the previous 50 days. With the influx of positive signals on the relative strength indicators, after reaching earlier areas of severe oversold operations, the price is also affected by the positive support. During its previous trading, it was able to breach a short-term corrective bearish trend line, as shown in the attached chart for a (daily) period, to approach the attack of the current resistance level 5.404.
Therefore, our positive expectations remain surrounding natural gas, as we expect more rise during its upcoming trading, especially in case it breaches the resistance 5.404, to target the pivotal resistance level 6.412.
