The price of natural gas demonstrates the formation of an uptrend. During the last week of April, prices fell by 11%. Then they rose by 6% at the beginning of May and last week they gained 15% more.
The rally was based on improving fundamentals, despite the oversupply.
The Energy Information Administration (EIA) reported that U.S. storage reserves of gas increased by 99 billion cubic feet last week. A smaller-than-expected restocking strengthened sentiment about increased demand in the markets.
Meanwhile, the total volume of gas in the U.S. underground caverns was 2.24 trillion cubic feet. This is 30.3% higher than a year ago and 17.9% above the five-year average of 1.9 trillion cubic feet.
Also, the cost of gas fuel was affected by forest fires in Canada.
According to a recent announcement by authorities in the Canadian province of Alberta, forest fires could spread to new areas in the coming days due to high temperatures and low humidity. Despite the successful liquidation of current fires, climatic conditions are not helping to normalize the situation.
As a result, the supply of natural gas from Canada to the United States was disrupted, and the price of raw materials began to rise. According to Refinitiv, on Wednesday gas exports to America fell to 6.4 billion cubic feet per day, the lowest level in two years.
On Thursday, the price of natural gas in the U.S. rose by about 2%. On average, prices have risen by 13% in the past 2 weeks since the fires began in Canada.
The pricing of natural gas will depend on further developments in the situation with forest fires and gas supplies. Disruption of gas transit could create a shortage of raw materials, which is likely to push prices up.
Natural gas prices are in the process of forming a third ascending wave on the H4 timeframe. The upward impulse increased after breaking through the top of the first wave at the level of 2.480. The main target of purchasing has not yet been reached.
Signal:
The short-term prospects for natural gas are buying.
The target is at the level of 3,015.
Part of the profit should be fixed near the level of 2.860.
The stop-loss is at the level of 2.454.
Bullish trend has a short-term character, so the volume of trade should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
