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Natural gas trading outlook: shifts movement in spite of above-normal temperatures

Natural gas edged up on Friday, ending a six consecutive sessions of declines, despite bearish EIA report and mild temperature forecasts.

Natural gas for delivery in January climbed 1.43% to $3.701 per million British thermal units by 9:33 GMT. Prices held in a daily range between $3.808 and $3.638, its lowest since October 28th. The energy source dropped 4.10% on Thursday to $3.649.

According to NatGasWeather.com, natural gas demand in the US over the next seven days will be moderate, compared to normal, with a slightly warmer trend for the December 12 – December 18 period.

Areas of rain are expected today as a mild weather system flows into the eastern US, while the very cold air will retain its position over the far northern US with no projection of pushing very far south across the border.

During the weekend the central and southern US will continue to enjoy above normal temperatures. High levels of snows and heavy rains are expected over the western US as a Pacific storm moves through the region, where despite the storm, temperatures will remain milder. Excluding the far northern US, temperature in the country will be slightly warmer than normal from Friday until next Monday.

Colder weather system are projected to move into the Midwest and Northeast by Tuesday, bringing temperature slightly below normal. Starting next weekend, moist Pacific weather systems will move though the country every few days, with areas of rain and snow, but overall warmer temperatures in the majority of the US.


According to AccuWeather.com, temperatures in New York on December 5th will range between 44 and 47 degrees, compared to the average of 35-46, before reaching the above-seasonal 43-47 on December 13th. Chicago will see readings of 38-37 degrees on December 6th, before overtaking normal temperatures by 11 to reach 47 degrees on December 12th.

Down South, the high in Texas City on December 5th will be 71 degrees, 5 above usual, before slightly falling to 59-68 degrees on December 12th. On the West Coast, today’s temperature in Los Angeles will peak at seasonal 69 degrees, before temperatures jump to 72-74 degrees between December 7th and December 11th.


The Energy Information Administration reported on Thursday that US natural gas inventories slid by 22 billion cubic feet in the week ended November 28th, below analysts’ projections ranging between 30 and 50 billion cubic feet. It was also beneath the five-year average gain of 50 bcf and last year’s decline of 141 bcf during the comparable period.

Total gas held in US storage hubs stood at 3.410 trillion cubic feet as of November 28th, narrowing its deficit to the five-year average of 3.782 trillion to 9.8% from 10.4% during the preceding seven days. Stockpiles were also 6.2% below the year-ago level of 3.637 trillion cubic feet.

The East Region saw a net withdrawal of 34 bcf to 1.830 trillion and was 9.1% below the five-year average, while inventories at the West Region rose by 1 bcf to 478 bcf and were 8.4% behind average levels. Stockpiles in the Producing Region rose by 11 bcf to 1.102 trillion, trailing the average by 11.6%.

Pivot Points

According to Binary Tribune’s daily analysis, January natural gas futures’ central pivot point stands at $3.698. In case the contract penetrates the first resistance level at $3.759 per million British thermal units, it will encounter next resistance at $3.868. If breached, upside movement may attempt to advance to $3.929 per mBtu.

If the energy source drops below its first support level at $3.589 per mBtu, it will next see support at $3.528. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $3.419 per mBtu.

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