Natural Gas Extends the Rally on Colder Weather and Declining Storage Forecasts
Natural gas futures have been riding on a rally for three days in a row in the wake of forecasts for the weather to turn colder than normal in the last week of January. In addition, analysts expect that U.S. storage of the commodity would decline last week.
Latest weather forecasters at Commodity Weather Group pointed out “signs of colder change increasing for the final week of January”, predicting seasonal to below-normal temperatures for the US Midwest, East and South over the next 16 to 30 days.
Meanwhile, weekly storage data, which is due for release on Thursday, is anticipated to show a draw in a range between 135 and 143 billion cubic feet in the week ended January 6. According to the U.S. Energy Information Administration, total natural gas in storage currently stands at 3.311 trillion cubic feet. That is 9.9% lower than levels at this time a year ago and less than 1% below the five-year average for this time of year.
Buy Stop at 3.355, Take profit at 3.440, Stop loss at 3.315