A natural gas ETF was one of the few bright spots in the markets Friday, with natgas futures hovering back above $3, as traders anticipated increasing electricity demand to beat the summer heat.
On Friday, the United States Natural Gas Fund (NYSEArca: UNG) gained 1.7% and held steady above its long-term trend at the 200-day simple moving average as Nymex natural gas futures added 1.8% to $3.02 per million British thermal units.
Supporting the natural gas market, weather models late Thursday and early Friday forecasted more intense heat in the long range, even as it showed slightly cooler trends in the medium term, Natural Gas Intelligence reports.
According to EBW Analytics, weather patterns could stay warm until the second week of July and delay the arrival of cooler weather.
Thursday’s “trading action suggests that bulls are not ready to quit and will try to push prices higher. If current forecasts hold, however, natural gas prices are likely to starting moving lower again soon,” EBW said.
Related: Why Natural Gas ETFs Are Burning Brighter
Natural gas markets experienced some swings Thursday, following a surprise storage miss and hotter weather trends for later this month. The Energy Information Administration’s storage inventory report for the week ended June 8 revealed a 96 billion cubic feet build that was considerably higher than even the most bearish of expectations. Storage inventories were at 1,913 billion cubic feet, or 785 Bcf below last year at this time and 507 Bcf below the five-year average.
“Any reversal off EIA data tends to be a strong technical signal for a continued move in that direction, but prices are now running into strong resistance at the top of this $2.97-3.00 range,” Bespoke analyst Jacob Meisel said told the Natural Gas Intelligence.
For more information on the natgas market, visit our natural gas category.