Pure Fuel Costs Could Rise on Colder Climate Forecast, EIA Stock in Focus

Pure Fuel Outlook – Speaking Factors

• Colder temperatures anticipated throughout the Southern US subsequent week might raise pure gasoline costs
• EIA storage report due out Thursday will seemingly drive costs going into the weekend
• Costs look to keep up slight bullish bias if trendline assist continues to carry

Pure gasoline might shift larger after an up to date temperature outlook from the Nationwide Climate Service’s Local weather Prediction Middle. It confirmed an elevated probability for colder-than-average temperatures within the central United States over the subsequent Eight to 14 days. Pure gasoline is closely utilized as a heating gas supply making its value extremely topic to modifications in climate in addition to provide and demand components available in the market.

NOAA 8-14 DAY OUTLOOK TEMPERATURE PROBABILITY

Supply: NOAA

That mentioned, provide and demand capabilities inside the market might give pure gasoline a lift within the close to time period. The most recent Weekly Pure Fuel Storage Report (launched March 4) from the US Vitality Info Administration (EIA) revealed that underground storage ranges continued to maneuver decrease for the week ending February 26, dropping 98 Bcf (billion cubic toes) from the week prior.

Whereas the falling stock bodes nicely for pure gasoline costs by way of the availability perform, demand might want to raise in tandem for costs to see a big climb. If the temperature outlook pans out, a bullish swing larger will seemingly happen. The main US storm system that barreled by way of Texas final month is one issue that brought about stock ranges to drop under the 5-year common. The subsequent EIA storage report is about to cross the wires on Thursday, in response to the DailyFX Financial Calendar.

EIA Underground Stock Ranges

Supply: EIA

Pure Fuel Technical Outlook

Month thus far, pure gasoline costs are down practically 4.5% regardless of the enhancements seen in storage ranges. The 38.2% Fibonacci retracement stage from the October – December transfer offered assist in opposition to a transfer decrease however shortly gave approach. A loosely fashioned trendline from the September swing low now seems to be underpinning costs.

A break decrease would seemingly open the door for costs to drop and take purpose on the 23.6% Fibonacci stage simply above the two.5 deal with. If that stage provides approach, the 200-day Easy Transferring Common (SMA) strikes into scope. Alternatively, if trendline assist holds a near-term bounce might assist orient costs larger and retake the 38.2% Fib stage.

Pure Fuel Every day Value Chart

Chart created with TradingView

Pure Fuel TRADING RESOURCES

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the feedback part under or @FxWestwater on Twitter