• Spot natural gas prices (CFDS ON NATURAL GAS) rose slightly during their early trading on Tuesday, to achieve slight daily gains until the moment of writing this report, by 0.20%.
• It settled at a price of $5.110 per million British thermal units, after advancing during Friday’s trading by 0.2%. 0.47%, during the last week the price slid down by -20.65%.

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With temperatures well below freezing in most parts of the US, the weekly cash prices for natural gas have soared. Cold weather attacked during the last week through freezing air and blizzards, which increased the demand for heating and slowed production. Natural gas production decreased from about 99 billion cubic feet per day to less than 95 billion cubic feet per day during the week, and the freezing of Exploration plants forced closures in many production areas.

Looking at the current week, forecasts called for a continuation of severe cold in the northern and eastern United States during Christmas Day. However, weather patterns were expected to reverse after the holiday, with cooler air receding into Canada and seasonally mild temperatures settling in quickly.

Earlier on Thursday, the US Energy Information Administration (EIA) reported a negative storage read, adding to the concern about futures for the past week. The Energy Information Administration recorded the withdrawal of 87 billion cubic feet of natural gas from underground storage for the week ending December 16.

The drop in the 16th week of December dropped inventories to 3,325 Bcf but left inventories above the five-year average of 3,303 Bcf.

Natural Gas Technical Analysis

Technically, the price is trying, with its recent rise, to compensate for part of what it incurred from previous losses, in light of the stability of its trading below the pivotal 5.310 resistance level. This happened amid the control of the bearish corrective trend in the short term along a slope line, as shown in the attached chart for a (daily) time.

In addition to that, the negative pressure continues due to its trading below the simple moving average for the previous 50-day period, with negative signals coming from the relative strength indicators.

Therefore, we expect natural gas to return to decline during its upcoming trading, especially as long as it stabilizes below 5.310, to target the 4.200 support level.

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