U.S. natural gas futures closed higher last week as investors surprisingly rallied in reaction the damage caused by Hurricane Irma and Florida and as production resumed in the Hurricane Harvey-damaged Texas Gulf Coast area.
November Natural Gas futures settled the week at $3.085, up $0.120 or +4.05%.
The reaction to Irma was a surprise because this hurricane caused enough damage to prevent millions of Floridians from receiving electricity. Therefore, demand was low in my opinion.
In other news, the EIA said in its weekly report that natural gas in storage rose by 91 billion cubic feet in the week-ended September 8. This was well above the estimate of 85 billion cubic feet.
The 91 bcf increase compares with a build of 65 bcf in the preceding week and represented a decline of 179 billion from a year earlier. However, it was 43 bcf above the five-year average.
According to the EIA, total natural gas storage stood at 3.311 trillion cubic feet, 5.1% lower than levels at this time a year ago and 1.3% above the five-year average for this time of year.
According to natgasweather.com, "Warmer temperatures will spread east this weekend and last through next week with widespread 80s and 90s for a return to stronger than normal national demand. Cooler exceptions will be across the West and far North."
"Overall, national natural gas demand will be moderate to low, increasing to moderate to high."
Additionally, two new tropical storms are being tracked in the Atlantic Ocean.
Demand is going to pick up when Floridians get their electrical power turned back on. FP&L says this should occur by September 22.
The weekly chart indicates that the key level to watch is $3.198. Overtaking this level with conviction and sustaining the rally will be bullish.
This article was originally posted on FX Empire
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