Spot natural gas prices (CFDS ON NATURAL GAS) declined during the recent trading at the intraday levels, to record daily losses. It settled at the price of $4.979 per million British thermal units, after rising in trading yesterday and for the seventh consecutive session. By 4.03%, during the month of January, spot contracts increased by 32.19%.
March natural gas NGH22 settled at $4.874 per million British thermal units, an increase of 5.1% for the session ending January with a gain of nearly 31%.
The commodity prices rose on expectations of cold weather, which threatens to boost heating demand later this week and likely affect gas production in Texas. Over the weekend, a snowstorm hit the northeastern United States, with record snow falling daily in Boston. The storm dumped eight inches of snow in New York City and recorded 23.8 inches in Boston, according to the National Weather Service.
Production rose above 95 billion cubic feet on Monday, according to Bloomberg estimates, after hovering below 94 billion cubic feet last week. However, the market focused on the possibility of a production freeze as cold temperatures were expected to spread this week.
Technically, the price’s bearish behavior comes in its early daily trading as an attempt to reap the profits of its recent rises. It gained positive momentum that may help it to continue this rise in the short term, because it was affected by the breach of the corrective bearish trend line earlier. The price is supported by its continuous trading above its simple moving average for the previous 50 days, also with the influx of positive signals on the relative strength indicators, despite reaching overbought areas.
Therefore, our expectations indicate that natural gas will rise during its upcoming trading, as long as it remains above the 4.740 level, to target the first resistance levels at the price of 5.404.
