Wednesday, Texas's power grid operator took emergency measures to avoid rolling blackouts as soaring electricity demand threatened to outpace available supplies amid stifling heat waves. A sudden surge in electricity demand requires a strong backup of the natural gas stockpiles.
Thursday, the weekly inventory was not encouraging enough to keep the bulls active. But the bears were fearful amid growing heating degree days which could continue to aid the surging demand for natural gas during the weekend.
Inflationary pressures have hampered natural gas production as well. But the prices could jump as the bullish consolidation seemed to be complete between 07:00 a.m. to 10:00 a.m. on Friday.
In the 15 minutes chart, natural gas has good buying support at the 200 DMA looks, which makes a sharp reversal likely.
In the hourly chart, the natural gas has formed a bullish hammer which is about to get confirmation soon. A sustainable move by the natural gas in an hourly chart well above the upper end of the ‘Ichimoku Clouds’ could lead to a bumpy move above the immediate launching pad at $6.690.
Natural gas remaining well above the 26 DMA in an hourly chart could make the natural gas bulls aggressive until this weekly closing. A weekly closing above $7.3 will keep the trend upward during the upcoming weeks.
Disclaimer: The author of this analysis does not have any position in natural gas. Readers are advised to take any position at their own risk, as natural gas is one of the most liquid commodities in the world.