Natural Gas Technical Analysis: Price Falls, Tensions Ease

[ad_1]

We expect the rise of natural gas to return during its upcoming trading.

Spot natural gas prices (CFDS ON NATURAL GAS) slightly decreased during the recent trading at the intraday levels, to record slight daily losses until the moment of writing this report, by -0.46%. It settled at the price of $5.437 per million British thermal units, after it decreased in yesterday’s trading by 1.71%.

Advertisement

Natural gas prices fell on Monday and settled lower as traders weighed evolving weather patterns and the potential for storage injections against steady production. There was continued strong demand for US exports, while traders remained focused on developments surrounding Russia’s invasion of Ukraine. This comes after the Financial Times reported that Russia might be willing to accept less stringent conditions in cease-fire talks than it had previously demanded.

Nymex gas futures for April settled at $5.508 per million British thermal units, down 6.3 cents on the day in the last trading day of the contract.

US natural gas production held steady at 95 billion cubic feet for the past week, according to Bloomberg estimates, well below its late 2021 highs near 97 billion cubic feet. Production has struggled to gain momentum in part due to weather outages and maintenance work, but also due to modest production of associated gas. Associated gas is a by-product of oil production, which has held steady in 2022 despite strong demand and rising prices.

Meanwhile, demand for LNG is hovering near record levels above 13 billion cubic feet. This was the case throughout the war in Ukraine, which is now in its second month.

US shipments of LNG that was already in high demand before the Russian invasion of Ukraine are now being ordered due to increasingly depleted global supplies. European countries have pledged to end their dependence on Russian energy due to the conflict, and the United States and other countries need to fill their stockpiles.

Technically, natural gas declined due to the stability of the current resistance level 5.710. This is the resistance that we talked about in our previous reports. This was the price target for the previous price hikes, to reap its profits and try to gain positive momentum that might help it breach that resistance. At the same time it tries to drain some of its overbought. This is evident in the relative strength indicators, especially with the start of negative signals from them.

All of this comes considering the dominance of the main bullish trend over the medium term along a slope line, as shown in the attached chart for a (daily) period, supported by its continuous trading above its simple moving average for the previous 50 days.

We expect the rise of natural gas to return during its upcoming trading, provided that it first breaches the resistance level 5.710, in order to assure us of its intention to rise, to then target the pivotal resistance level 6.412.

[ad_2]

Leave a Reply

Your email address will not be published. Required fields are marked *

Risk warning: Trading in Contracts for Difference (‘CFDs’) carries a high level of risk and can result in the loss of all your investment. As such, CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever. For more information about the risks associated with trading CFDs please find and read our ‘Product Disclosure’.


Please recognize that this website is the only official website, please do not enter other clone websites through Internet search or advertisements.


© 2011 - 2024 mgtinvesting.com. All Rights Reserved.

en_USEnglish