natural gas may hit usd7

http://www.bloomberg.com/apps/news?pid=20601087&sid=amXWiAO_DhD8

Natural Gas May Climb to $7, Invest AD Says: Technical Analysis

By Haris Anwar

Oct. 11 (Bloomberg) -- Natural gas may climb to $7 per million British thermal units after the commodity last month rebounded from a long-term support level, according to Abu Dhabi-based Invest AD.

Natural gas futures have almost doubled to $4.77 per million British thermal units since reaching a more than seven- year low on Sept. 4.

“Holding above a 20-year support and rebounding sharply from that level, signals an increase in demand for natural gas,” said Aksel Kibar, a portfolio manager at Invest AD, the investment firm owned by the Abu Dhabi Investment Council. “Any break above the $5.00-$5.50 range will push the prices toward the $6 to $7 area.”

Gas for November delivery fell 3.9 percent to $4.77 on the New York Mercantile Exchange Oct. 9. The fuel is down 15 percent this year, while crude oil is up 61 percent.

“Natural gas underperformed crude oil in the last 10 years and in September the natural gas and crude oil ratio reached the lowest level in 20 years,” Kibar said. “This clearly shows an oversold condition for natural gas.”

Support is an area on charts where buy orders may be clustered, making further price decreases more difficult. At resistance, sell orders may be clustered. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.

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