- Spot natural gas prices (CFDS ON NATURAL GAS) jumped in early trading on Monday, to achieve strong daily gains until the moment of writing this report, by 10.59%, to settle at a price of $6.682 per million British thermal units.
- This happened after rising during trading on Friday and for the third day, respectively, by 6.52%.
- During the past week, natural gas advanced by 10.38%.
Despite mostly mild weather across the lower 48 states, winter unleashed rage on the West Coast early in the season, as freezing temperatures and unusually heavy rains fueled demand for natural gas at a time when storage stocks were low. The drought has reduced hydropower supplies and regional utilities are having trouble receiving coal shipments.
Harsh winter weather swept the West Coast this month, driving up heating consumption in a region that typically sees its highest energy needs in the summer.
The National Weather Service (NWS) said widespread heavy precipitation would begin covering the Pacific Northwest and northern California beginning Friday and then over the weekend in the northern Rocky Mountains, the Great Basin and the rest of California. Abnormally heavy snowfall, as well as heavy rain at lower elevations along the west coast.
Meanwhile, Russia's Gazprom announced on December 9 that it recorded the highest level ever in daily exports of Russian gas to China through the power of the Siberian gas pipeline.
Natural Gas Technical Analysis
Technically, natural gas succeeded in getting rid of the negative pressure of the simple moving average for the previous 50-day period, supported by the positive signals in the relative strength indicators. This happened after reaching earlier oversold areas, to attack in turn, with its recent trading on the intraday levels, a bearish corrective slope line in the short term. This is shown in the attached graph for a period (daily).
Therefore, our expectations suggest a further rise for natural gas during its upcoming trading, especially as long as it stabilizes above the level of 6.412, targeting the resistance level of 7.548.
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