|Natural Gas Holds Key Technical Support, Path of Least Resistance Remains Higher
Natural gas prices continue to climb as market participants grow weary of low stockpiles ahead of the winter season. Global energy prices have soared of late, with large supply shortages now threatening the post-pandemic economic recovery. Major factories have been forced to close across Europe as rising energy costs have reduced the ability to produce products profitably. Rising gas prices have caught the attention of the White House, with top officials meeting to discuss solutions to alleviate domestic price pressures.To get more news about exness, you can visit wikifx.com official website.
A US government report Thursday showed natural gas inventories posted a smaller-than-expected gain, further stoking fears of a widespread shortage over the winter months. For the week ending 10/8, inventories grew by 81 billion cubic feet (Bcf), short of the median Bloomberg estimate of 94 Bcf. The current month futures contract reached an intraday high of $5.964 per million British thermal units, but settled lower as mild temperatures look set to sweep across much of the United States in the coming days. An additional report from the Energy Information Administration noted that US homeowners could be facing the highest winter energy bills since 2007-08, which will place additional pressure on the Federal Reserves “transitory” stance on inflation.
Natural gas futures crucially held key trendline support during the recent pullback, indicating that the uptrend may continue in the near-term. Front-month futures pulled back in early October after a brief test of the 2014 high of $6.493, finding support in the form of an ascending trendline. With the uptrend remaining intact, price may look to break back above $6.00 en route to a retest of the 2014 high. The fundamental outlook remains constructive for higher prices, despite efforts by politicians to increase supply to the market. Should price reverse lower through trendline support, price may gravitate toward the psychological $5.00 level before it eyes the 50-day moving average below.
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