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Technical Breakdown May Accelerate as Fundamentals Wane

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Pure Gasoline Forecast – Speaking Factors

  • Natural gas demand could take massive hit on warmer-than-average temperature forecast
  • Seasonal shift in temperature prone to preserve stress on costs from the demand facet
  • 200-day Easy Shifting Common in focus as trendline break sees costs transferring decrease

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The newest 8- to 14-day temperature outlook from the Nationwide Climate Service’s Local weather Prediction Heart paints an unfavorable image for pure fuel costs. Forecasted temperatures within the northeastern and western parts of the US shall be above common over the subsequent two weeks. The south will possible be cooler than regular. Total, the anticipated hotter climate – particularly throughout the northeastern US – will possible weigh on demand, driving pure fuel costs decrease.

NOAA 8-14 DAY OUTLOOK TEMPERATURE PROBABILITY

NOAA Temp outlook 8-14 day chart

Supply: NOAA

With spring shortly approaching in the US and hotter climate together with it, pure fuel costs could come beneath elevated stress because the heating fuel faces decreased demand prospects. Analysts expect a draw of solely 21.67 billion cubic toes (bcf) for this week’s EIA storage change, in keeping with Bloomberg’s median forecast. That compares to a 52 bcf draw for the week prior.

That stated, even when hotter climate doesn’t manifest this week because the NOAA’s forecast lays out, pure fuel costs face decreased demand going into the summer time. Whereas late-season storms or uncommon chilly spells throughout the US stay potential, bullish sentiment seems to be on the backfoot as costs proceed to maneuver decrease. A elementary shift might want to see a big shock to produce or demand if costs are to maneuver larger.

EIA Pure Gasoline Shares Weekly Change versus Pure Gasoline Value

Natural gas EIA stocks change vs price chart

Pure Gasoline Technical Forecast

Costs have damaged beneath a key trendline from the September swing decrease earlier this week, severely degrading pure fuel’s technical posture. The 23.6% Fibonacci retracement from the October to December transfer was decisively breached on the violent draw back transfer. The entire transfer from the February swing excessive is now at 25%.

The 200-day Easy Shifting Common (SMA) – which sits inside 2% of present costs at 2.445 – is now in focus for a possible space for bulls to defend. MACD is oriented decrease with a bearish tilt whereas the Relative Energy Index (RSI) hovers simply above oversold territory. If the 200-day SMA breaks, extra losses could also be in retailer. Alternatively, a short-term bounce of the important thing SMA could be unsurprising, however look ahead to any bounce to fade given the elemental backdrop.

Pure Gasoline Day by day Chart

natural gas prices

Chart created with TradingView

Pure Gasoline TRADING RESOURCES

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the feedback part beneath or @FxWestwateron Twitter





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