Commodities▼ Bearish
Natural Gas Stalls at $2.85 as 50 EMA Caps Rally
Natural gas stalled at $2.85 as the 50-day EMA capped gains. A storage glut and contract roll weigh on upside. Trader Chris said consolidation persists until a break above $3.
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Natural gas stalled at the $2.85 resistance level during Thursday's session, with the 50-day exponential moving average continuing to cap gains. The front-month September contract spiked toward the 50-day EMA on Wednesday but reversed lower, keeping the market inside a narrow consolidation range.
Chris, a proprietary trader with more than 20 years of experience across commodities and currencies, said the $2.85 area has held as a barrier for now. The contract is approaching the roll to October, which typically shifts focus to autumn heating demand. Chris noted that the October contract should start to focus on dropping temperatures, bringing seasonality into play. A storage glut remains a headwind. U.S. natural gas inventories are well above the five-year average for this time of year, limiting the market's ability to rally on supply concerns.
A potential catalyst is the Middle East situation and its impact on European demand for U.S. LNG exports. Chris said that story is not quite there yet but is on his radar for the next couple of months. Any escalation that threatens exports could tighten the domestic balance.