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Natural Gas Futures Recover from 2017 Lows

Natural Gas futures kicked off the week strong as weather forecasts point to a warm remainder of July. With roughly 50% of homes in the U.S. relying on gas to beat the summer heat, weather forecasts can trigger both bullish and bearish runs for the volatile commodity.

Today’s gains fall on the heels of a solid week previous as the summer heat continues to push the energy commodity into bullish territory. However, Natural Gas is still considered in bearish terrain, as its currently sitting well below its 200-day moving average and just slightly above a 2017 low of $2.83 per MMBtu (million British thermal units).

In addition to keeping an eye on mother nature’s plans, Natural Gas futures traders are sure to monitor Thursday’s Energy Information Administration’s (EIA) Natural Gas Report, which measures week over week storage levels.

The above chart showcases Augusts’ Henry Hub Natural Gas Futures Contract, traded on the Globex Exchange, since 2005. In reviewing the big picture, one can easily distinguish that natural gas has been on a bearish run since late 2008. As improvements in extraction technology continue to evolve, coupled with robust supply levels and new fields popping up across the country, the lows of 2017 could potentially be the new norm.

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