FxWirePro: Natural gas bulls target $3.47 on lower inventory

After finding support around the $2.75 area per MMBtu, the bulls are firing natural gas prices higher in the United States. After clearing the major resistance area around $3.10 per MMBtu, the price is currently trading at $3.22 per MMBtu area.

Two major fundamentals are providing support to the bulls,

• The level of inventory this year remains dire as the winter season approaches. The injection period is set to end in November or in just 8-9 weeks, but the inventory currently stands at 2.77 trillion cubic feet (tcf), which is 0.69 trillion less than last year and 0.62 trillion below the 5-year average.
• In addition to that, the global natural gas prices have remained close to the record. In the UK, natural gas is trading at 75 pence per therm, just shy of its record high made earlier this year. In Japan, the price is at $11 per MMBtu.

Based on calculations, I expect the natural gas price to reach as high as $3.47 per MMBtu in the current run as the bulls remain in charge.