Short term
Trade view / 27 July 2016 at 13:56 GMT

Charts point lower for natural gas

Managing Partner / Spotlight Group
United Kingdom
Instrument: NGU6
Price target:
Market price:

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.

Nat Gas
 Source: 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
Nat Gas
 Source: Spotlight Ideas

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.
Stop: 279.00.
Time horizon: short-term.

— Edited by D. Deacon

Non-independent investment research disclaimer applies. Read more
Stephen Pope Stephen Pope
Error here and this is entirely my fault. I did not enter the max and min of a range in my Fibonacci calculations correctly.

I do apologise

it should read as:

Parameters: Natural Gas US Cents/Mm BTU September 2016 NGU6
Entry: Sell 2.708 14:22 BST.
Targets: 2.66 ... 2.62 ... 2.58 ... 2.56
Stop: 2.79
Time horizon: short-term.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail