📌NATGAS falls to 6-week lows below $2.5 per MMBtu
U.S. Henry Hub natural gas futures (NATGAS) are losing more than 2% today and slipping below $2.5 per MMBtu.
Weather forecasts suggest a movement of a wave of cooler temperatures toward the central US states and a gentle drop in temperatures on the East Coast.
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile app- Not only lower air conditioning demand in many regions of the US, but also historically high inventories above the 5-year average are causing oversupply concerns. The five-year average change in gas inventories for the week ended June 28 was +69 billion cubic feet; more than 20% above the five-year average.
- Recent heat waves have failed to lift gas prices permanently above $3 per MMBtu. Projected lower demand, full storage facilities and higher production are weighing on sentiment. In Texas, where high temperatures persist, power grid operator ERCOT conveyed that peak demand this week will approach but not break this year's records.
NATGAS is losing 2.5% today and testing a key support zone set by the 100-day exponential moving average (purple curve on the chart). Source: xStation
Forecasts show a drop in temperatures in parts of the central and eastern US coast. Source: NOAA
The market side is concerned that lower forecasts will accentuate the negative price-forming impact caused by high inventories against the historical 5-year average. Source: Bloomberg Financial LP
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
