Investing.com -- U.S. natural gas futures are experiencing a decrease as market participants shift their focus to the front month of March and anticipate the Energy Information Administration's (EIA) weekly inventory report.
The expectation is that natural gas storage will transition from a surplus to a deficit against the five-year average. This shift follows last week's Arctic weather conditions, which increased heating demand and resulted in some production shutdowns.
The market is currently paying close attention to February's temperature forecasts, which are predicted to be milder. Simultaneously, production has been on the rise, both factors contributing to a downward trend in prices. Nymex gas has seen a 1% decrease, now standing at $3.139 per million British thermal units (mmBtu).
Analysts at Fairlead Strategies have noted that natural gas futures have dropped below their 50-day moving average, increasing the near-term downside risk to the next support level near $3.00 per mmBtu.
This pullback has caused the weekly stochastics to decrease, indicating an intermediate-term setback. This is expected to support several weeks of sideways-to-lower action for natural gas. Analysts have also identified secondary support near $2.82 per mmBtu.
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