Sizzling Temps Help Spike Natural Gas Prices

It has been quite a week for natural gas prices, spiking 8% yesterday and positing the biggest daily gains in seven months after new data showed a historically small addition to stockpiles last week, easing fears of a glut.

Analysts pointed to higher temperatures in the heavily populated areas of the U.S. causing increased demand for natural gas to power air-conditioning units. With forecasts looking like severe heat could stick around in August, traders are expecting a $3/mmBtu handle to be the next area of resistance as momentum takes shape. Prices are currently $2.88/mmBtu on this Friday afternoon.

Looking at a historic chart for natural gas prices, you can see there is plenty of overhead resistance long-term:

Shares of United States Natural Gas (NYSE:UNG) are up over 5.6% this week as we head into the weekly close. Year-to-date, the ETF is lower by 1%.

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