A natural gas exchange traded fund has found support at its short-term trend and is now testing its long-term trend line ahead of Thursday’s inventory data, with gas prices hitting an eight-week high on the late-summer heat.
The United States Natural Gas Fund (NYSEArca: UNG) was flat Tuesday, but the fund has gained 14.5% since the August 9 low. UNG found support at the 50-day moving average and is testing its 200-day average.
NYMEX natural gas futures were hovering around $3.72 per million British thermal units at the close Tuesday.
U.S. natural gas stockpiles dwindled on the warmer-than-expected lat-summer temperatures, which helped drive electricity demand for air conditioning, Investing reports. Power generation makes up 32% of U.S. gas demand.
The U.S. Energy Information Administration will release storage data Thursday, and the markets expect a range from 55 billion cubic feet to 68 billion cubic feet in new injections, compared to the 61 bcf rise for the same period year-over-year. The five-year average for the week is 74 bcf.
“Traders are expecting a smaller-than-average storage injection and that’s been supportive for prices,” Gene McGillian, an analyst and broker at Tradition Energy, said in a Bloomberg article. “The market continues to try to push higher.”