{"id":9150,"date":"2023-05-15T21:26:38","date_gmt":"2023-05-16T01:26:38","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/commodities\/natural-gas-up-5-nears-trigger-point-for-rally-on-talk-of-output-cuts\/"},"modified":"2023-05-15T21:26:39","modified_gmt":"2023-05-16T01:26:39","slug":"natural-gas-up-5-nears-trigger-point-for-rally-on-talk-of-output-cuts","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=9150","title":{"rendered":"Natural gas up 5%, nears trigger point for rally on talk of output cuts"},"content":{"rendered":"
\n

Investing.com — Talk of output cuts is beginning to influence trading in U.S. natural gas, which rose almost 5% Monday, nearing the trigger for what could be an extended rally in America\u2019s favorite fuel for indoor temperature control.<\/p>\n

\u201cDue to the low pricing environment in 2023, producers [are] expected to decrease drilling, and in recent weeks we have seen lower production volumes due to maintenance,\u201d Houston-based energy markets advisory Gelber & Associates said in a note on natural gas. \u201cThis drop may be indicative of further production drops in the near future and is consequently putting upward pressure on natural gas prices.\u201d<\/p>\n

The gas contract on the New York Mercantile Exchange\u2019s Henry Hub settled at $2.3750 per metric million British thermal units, up 10.9 cents, or 4.8%, on the day. The run-up was in follow-through to last week\u2019s 6% jump in the benchmark gas contract.<\/p>\n

Gas futures have been stuck at mid-$2 or lower since mid-March from benign weather that has created little need for either heating or cooling. Topping that has been robust production of the fuel, which has steadily added to the glut in gas supply.<\/p>\n

Total in underground caverns in the United States stood at 2.141 trillion cubic feet, or tcf, during the week ended May 5. That was 31.2% higher from the year-ago level of 1.632 tcf and 18.4% above the five-year average of 1.809 tcf.<\/p>\n

Notwithstanding the relative stability of $2 pricing, Henry Hub\u2019s front-month is down more than 50% on the year since the end of last year.<\/p>\n

Talk of output cuts has gained momentum on the gas market in recent weeks, supported by the decline in drilling rigs that directly translate to production.<\/p>\n

For the week ending May 12, the U.S. declined by 17 to 731. This is the lowest level observed since June 2022, with the weekly decrease marking the most significant drop since June 2020, historical data released by the U.S. Energy Information Administration showed.<\/p>\n

However, despite the decline, the overall U.S. rig count is up by 17, or 2%, from a year ago.<\/p>\n

Gelber also cited cooler weather in the U.S. Northeast that might support some indoor heating demand, and sweltering temperatures on the West Coast that could drive power demand for more air-conditioning in the near term.<\/p>\n

For the gas market to have an extended rally, bulls need to take the market above the $2.40 mark, Sunil Kumar Dixit, chief technical strategist at SKCharting.com, said, citing technical charts for Henry Hub\u2019s front-month contract. The market neared that point on Monday, with a session high of $2.383 for the benchmark contract.<\/p>\n

\u201cThe target should be a day close above the 50-Day EMA, or Exponential Moving Average, which is dynamically positioned at $2.39,\u201d said Dixit. \u201cThat will smoothen the path for a retest of the swing high $2.53, followed by the 100-day SMA, or Simple Moving Average, of $2.74. Following that, the next major hurdle to cross would be $3.03.\u201d<\/p>\n

On the flip side, he said, a sustained break below $2.03 will resume correction towards $1.94 and the major support at $1.74.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Investing.com — Talk of output cuts is beginning to influence trading in U.S. natural gas, which rose almost 5% Monday, nearing the trigger for what could be an extended rally in America\u2019s favorite fuel for indoor temperature control. \u201cDue to the low pricing environment in 2023, producers [are] expected to decrease drilling, and in recent […]<\/p>\n","protected":false},"author":1,"featured_media":7289,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[242],"tags":[83],"class_list":["post-9150","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-commodities","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nNatural gas up 5%, nears trigger point for rally on talk of output cuts | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Investing.com -- Talk of output cuts is beginning to influence trading in U.S. natural gas, which rose 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