Gold Silver Reports — Natural gas futures jumped during Wednesday’s session amid bullish technical signals just one day before the U.S. Energy Information Administration is scheduled to release its weekly inventory update.
The inventory data will be closely watched in the aftermath of the EIA’s report of a historic build in natural gas stocks in the week ended Feb. 24. This was only the second time since the EIA began collecting data that there has been an inventory injection in the high demand period of December-January.
Another bearish fundamental for natural gas, the EIA on Tuesday reduced its 2017 price forecast for Henry Hub spot prices by 12% due to a warmer winter. The EIA is expecting natural gas demand in February to be its lowest for the month in eight years. But, new natural gas export capabilities and growing domestic gas consumption will contribute to spot prices increasing to an average $3.45/MMBtu in 2018, the EIA added.
Natural gas futures were recently up 3.4% at $2.925 per million BTU. Technical indicators had the commodity rated as a Strong Buy. Natural gas has climbed above its weekly first and second resistance levels amid fresh technical buying signals. First resistance was at $2.843 and second at $2.918. Third resistance appears intact, with the commodity tracking higher in the session, oscillating in the +3-4% range, but failing to breach that $2.946 level. There is some congestion right now, but scaling $2.946 could trigger another leg higher.
Of course, traders may be a bit reluctant to be any more bullish with the inventory data due Thursday. Whatever the outcome of the inventory report, it could trigger natural gas’s next big move, in either direction. — Neal Bhai Reports