The price of natural gas rises in summer

08 June 2023 234
The price of natural gas rises in summer

Yesterday, the price of natural gas in the U.S. rose by 3% and reached a one-week high. Forecasts of warm weather contributed to this. According to Gary Cunningham, director of market research at Tradition Energy, the expected heat suggests an increase in gas demand from the energy sector over the next three weeks.

 

According to Refinitiv, the Cooling Degree Days (CDD) index is predicted to rise to 164 in the next two weeks. The average figure for 30 years is 147. CDD is determined by the number of degrees by which the average temperature for the day exceeds 18 degrees Celsius and gives an indication of the probable demand for cooling.

 

According to Refinitiv estimates, natural gas consumption in the U.S. energy sector will jump to 37.6 billion cubic feet per day this week. It was 31.8 billion last week. Thus, the total demand for gas fuel will rise to 95.7 billion cubic feet per day this week.

 

Increased demand for electricity amid increased use of air conditioners reduces the amount of fuel that can be put into storage for the winter heating season. This contributes to higher prices.

 

The rise in gas prices is being controlled by full reservoirs in Europe. But Klaus Muller, head of the German Federal Network Agency, is warning that the energy crisis in Europe's largest economy is not over.

 

Last year, Germany did a lot to diversify supplies and reduce the country's dependence on Russian gas. According to Muller, currently the main factor influencing the level of gas reserves is the weather.

 

If Europe has a cold winter, Germany will profit from any precautionary measures to save energy. It will reduce overall gas demand and have some impact on prices, but not in the summer period.

 

The price of natural gas is in the formation of a corrective uptrend on the H4 timeframe. Price has technically pulled back from trend support, signaling a move toward resistance.

 

Signal:

The short-term prospects for natural gas are buying

The target is at the level of 2.660.

Part of the profit should be fixed near the level of 2.450.

The stop-loss is at the level of 2.070.

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.

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