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Important Notice - Fraud awareness
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The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Natural Gas Prices Continue To Sink Out Of Winter

US natural gas futures (NGH) fell for a third consecutive week, settling at $2.087 per MMBtu on March 17, 2023. This is the lowest price since December 2020 and last month. The decline was attributed to a warm winter and balmy spring weather, which reduced demand for heating and cooling. As a result, the US natural gas storage level is now 36.1% higher than the year-ago level and 22.7% higher than the five-year average. The market is now looking for signs that demand will pick up as the weather turns warmer.

Natural Gas Futures Outlook

The price of natural gas dropped significantly, from a 14-year high of $10 per MMBtu in August to $7 in December, before settling in the mid-$2 range in recent weeks.

Natural gas storage in the United States stood at 1.9 trillion cubic feet (Tcf) as of March 17, 2023, a 36.1% increase from the same day a year earlier and 22.7% higher than the five-year average for that date. According to the Energy Information Administration (EIA), the increase in storage was primarily due to milder-than-normal weather conditions in the winter months.

US natural gas futures are trading near their lowest levels in recent months, but this could be a sign that the market is bottoming out. A decrease in downside momentum can sometimes precede a reversal, as investors become more confident in the market's ability to recover.

4-Hour Chart – Falling Wedge Continues Growing

4-Hour Chart – NGH (Falling Wedge Continues Growing)

The 4-hour chart shows that the Falling Wedge pattern, which was identified earlier this month, is still developing. As long as natural gas remains within the confines of this pattern, the near-term outlook remains bearish. However, an upside breakout would open the door to a bullish reversal. Once the price breaks through the 10 and 20 moving averages on the 4-hour chart, it would focus on the 50-period Simple Moving Average (SMA), which is currently at $2.3539 and may act as resistance.

Last Updated: 28/03/2023

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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