Trade view /
27 July 2016 at 13:56 GMT
US natural gas futures declined for a second consecutive session on Tuesday, July 26, on speculation that the soaring temperatures in July will not prevent stockpiles reaching record levels before winter sets in.
Natural gas for delivery in September on the New York Mercantile Exchange is trading at USD 2.708/Mm BTU as at 14:22 BST.
This places the spot level with the 50-day moving average, and some 47 cents above the 200-day metric.
The 3-month chart shows reveals that a small corrective channel has showed signs of forming with the price area marked by upside congestion at the 2.67 level.
Source: www.investing.com Spotlight Ideas
The fundamentals show that total US natural gas storage stood at 3.277 trillion cubic feet last week, according to the US Energy Information Administration. This was 14.4% higher than levels at this time last year, and 17.1% above the 60-month average for this time of year.
The market sentiment is that unless intense summer heat leads to an excessive boost in demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.
This week's storage report is scheduled for Thursday and is expected to show a build in a range between 19 billion to 31 billion cubic feet for the week ending July 22. That compares with an increase of 34 billion cubic feet in the prior week, 49 billion a year earlier, and a five-year average of 52 billion cubic feet.
Natural gas 5-year chart
Management and risk
Parameters: Natural Gas US Cents/Mm BTU September 2016 NGU6
Entry: Sell 2.708 14:22 BST.
Targets: 266.01 ... 262.00 ... 257.98 ... 255.51.
Time horizon: short-term.
— Edited by D. Deacon
Non-independent investment research disclaimer applies. Read more