Natural Gas steams higher in Asia
Tony Sycamore October 26, 2021 12:31 PM
A pledge by Russia to increase natural gas supply to Europe, along with aggressive intervention last week by the NDRC in the coal and the LME in copper, eased concerns over surging commodity prices, inflation and an energy crisis.
However, a shift in weather models over the weekend that predicts colder weather in the U.S. helped propel the price of natural gas 13% higher overnight to close at $5.98 (+13.22%).
The forecast of cooler weather is typical at this time of the year and comes after a run of warmer weather that allowed producers to store more gas than usual.
Nonetheless traders remain acutely aware that inventories remain low and that the U.S. is expected to export excess gas to help ease shortages in Europe and Asia.
No doubt also contributing to the overnight rise, nerves ahead of the expiration of the November Natural gas futures expiration later this week.
Last but not least, U.S. President Biden's energy security advisor claims that Russia is using natural gas as a political tool to fast track approval of its controversial Nord Stream 2 pipeline.
The price of natural gas is trading another 3% high in the Asian time zone today at $6.08, further supporting the idea that the pullback from the $6.466 high to the $4.825 low was a correction within a bull market.
Providing natural gas does not break below support $4.80/$4.70 a bullish bias is in place looking for a retest of the October $6.466 high. Mindful that if resistance at $6.50 breaks, there is very little in the way of resistance until $10.00.
Source Tradingview. The figures stated areas of October 26th, 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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