Expectation of A Massive U.S. Supply Draw Spurs Natural Gas Demand
U.S. natural gas futures soared strongly on Wednesday after having fallen to the lowest level in nearly a month yesterday. Natural gas for January delivery on the New York Mercantile Exchange surged more than 6% to around $3.500 per million British thermal units as investors are betting on expectations of a massive U.S. inventory draw.
Natural gas futures closed last week lower due to forecasts for less cold weather which tends to result in lighter heating demand through the end of the year. However, economists expect weekly supply data due on Thursday will show a draw in a range between 197 and 210 billion cubic feet in the week ended December 16. If confirmed, it would be the biggest weekly withdrawal since 2010 and far exceeding last week’s decline of 147 billion cubic feet.
Buy Stop at 3.500, Take profit at 3.580, Stop loss at 3.460