On comparative analysis of the price of natural gas, I find that the comparatively higher price-rise in Europe will continue to vanish the over-production issue.
An in-depth analysis of the movements of natural gas futures indicates the continuity of the bullish sentiment that has witnessed a slow and steady uptrend after a gap-down opening this week due to the announcement of warm winters. This attracted value-seeking buyers below $3.726 that resulted at the beginning of an uptrend from the week’s low at $3.640.
Natural gas finally formed a base at a range – from $3.647 to $4.726 before heading upward. I find that traders look ready to buy the U.S. natural gas while they see a sudden surge in European prices as the demand is still pending for popping up shortly. I find that the current upward move in U.S. natural gas seems to be a short-covering by hesitant bears while futures were hanging at 200 DMA.
Natural gas looks ready to form a base above $4.988 after this weekly inventory announcement that could find the withdrawal could be more than expectations for 57 Bcf on Thursday. Undoubtedly, some analysts feel that the futures already formed the peak at $6.526 in October, but most analysts still believe that the high is pending. I find that the futures could see a sudden move with a sudden shift in the weather forecast.
Finally, I conclude that the last three daily candles have confirmed a breakout soon well above $5.868 shortly, which will ensure the advent of a breakout rally in natural gas during the middle of this month.
Disclaimer: The author of this analysis does not have any position in Natural Gas futures. Readers are advised to take any position at their own risk; as Natural Gas is one of the most liquid commodities of the world.