Natural Gas News: Market Poised for Breakout as Multiple Bullish Factors Converge

Natural Gas Prices Surge on Bullish Signals

U.S. natural gas prices climbed higher at mid-session Friday, building on Thursday’s reversal. The market briefly dipped below the 50-day moving average before buyers stepped in, recognizing value at pivots of $2.252 and $2.214. Closing above the 50-day moving average at $2.284, prices are now approaching the main top at $2.436.

At 17:48 GMT, natural gas futures are trading $2.408, up $0.060 or +2.56%.

Technical Analysis Points to Potential Breakout

A trade through $2.436 would signal a trend change. While resistance may emerge at $2.482, breaking this level could propel prices towards the major 50% level at $2.757 and the 200-day moving average at $2.802. Current price action suggests strong support at the 50-day moving average and pivot levels.

Bullish Storage Report Fuels Price Gains

The Energy Information Administration (EIA) reported a net increase of 58 Bcf in working gas storage for the week ending September 13, 2024. This build, while matching some estimates, fell significantly below the five-year average of 80 Bcf. Total storage now stands at 3,445 Bcf, 194 Bcf higher than last year and 274 Bcf above the five-year average.

Weather and Supply Concerns Add to Market Momentum

Traders are closely monitoring tropical weather developments. The National Hurricane Center is tracking disturbances that could impact Gulf Coast production and demand. Additionally, cooler temperatures in Texas and the eastern U.S., contrasted with heat in the West and Plains, are influencing market dynamics.

LNG Project Developments on the Horizon

LNG Canada is carefully considering the timeline for its second phase Final Investment Decision (FID). CEO Jason Klein emphasized that while prerequisites are in place, the decision hinges on global competitiveness, capital costs, and market conditions. This development could significantly impact future natural gas supply and pricing.

Market Forecast

Based on the technical breakout potential, bullish storage data, and ongoing supply-demand factors, the short-term outlook for natural gas prices appears bullish. Traders should watch for a confirmed break above $2.436, which could trigger further upside momentum. However, be prepared for potential resistance at key levels as the market gauges the impact of weather events and LNG project developments.