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Natural Gas Prices Surge Amidst Favorable Market Conditions

natural gas prices

Bullish momentum propels natural gas prices, marking significant gains due to increased demand and reduced inventory.

Natural gas prices surged 14% last week, marking the most significant weekly gain since mid-June. Key factors contributing to this surge include cooler weather, a more petite inventory build, and increased exports. The recent momentum suggests a potential substantial rebound for natural gas, reaching an eight-month high due to higher heating demand, a lower-than-expected inventory build, and escalating exports.

Natural Gas Prices Reach Eight-Month Highs

Last week’s 14% increase in natural gas prices was notable, driven by rising US gas demand, including exports, predicted to continue over the next two weeks. Analyzing, natural gas broke above a critical resistance level at 3.03, representing the March and August highs, triggering a significant breakout from an eight-month sideways pattern.

The pattern indicates a potential rise to approximately 4.00-4.10 in the upcoming weeks. Last week’s surge saw natural gas prices breach the 200-day moving average and decisively surpass the 89-day moving average for the first time this year. Although natural gas experienced a pullback in August-September, it found substantial support at the lower edge of the Ichimoku cloud.

Noteworthy is that natural gas established a higher low for the first time in 2023, solidifying a higher-high-higher-low sequence in the interim. The 30-month moving average, coinciding with the 200-month moving average, hovers around the psychological 4.00 mark. Subsequent resistance levels lie at 4.20 (the 38.2% retracement of the November 2022-February 2023 decline), followed by the October 2022 low of 4.75. However, a drop below the August low of 2.40 would invalidate the bullish outlook. Immediate support stands at 3.03.

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