Spot natural gas prices (CFDS ON NATURAL GAS) slightly declined during the recent trading at the intraday levels, to record daily losses until the writing this report, by -0.15%. The price settled at $4.568 per million British thermal units, after declining during yesterday’s trading by -4.27%.
Russian President Vladimir Putin said in a speech on Monday that he recognized the independence of pro-Moscow separatist factions in Luhansk and Donetsk, Ukraine, and ordered troops to enter separatist areas as he referred to them as peacekeepers.
US President Joe Biden on Tuesday increased pressure on Russia with economic sanctions and troop movements in response to the escalation on the Ukrainian border. This was the latest campaign against the country by Ukraine's western allies after President Vladimir Putin announced that he would recognize the sovereignty of two pro-Russian breakaway states along the eastern border and defend them with "peacekeeping" forces.
News of the Russian actions and the imminent consequences triggered higher natural gas and oil prices during the day.
Natural gas futures on the New York Mercantile Exchange for March were flat at $4.498 per million British thermal units, an increase of 6.7 cents from Friday's close. April futures rose 8.4 cents to $4,461.
President Biden promised that his administration would try to protect domestic consumers from the consequences for Russia. NATO allies were expected to put increasing pressure on Russia's main economic levers and the oligarchs closest to Putin.
As happened following Russia's annexation of Crimea in 2014, President Biden announced sanctions against two additional Russian financial institutions. One is against the state-owned development company VEB.RF and its military bank. Biden said there would also be sweeping sanctions on the country's sovereign debt, essentially blocking Western funding from Russia.
Technically, the price is trying to gain positive momentum that might help it recover and rise again, in light of the dominance of the main bullish trend in the medium term along a slope line, as shown in the attached chart for a (daily) period, with the positive pressure continuing to trade above its 50-period simple moving average. The previous days, in addition to the influx of positive signals on the relative strength indicators.
Therefore, we expect the rise of natural gas to return during its upcoming trading, as long as the support level 4.214 remains intact, to target the first resistance levels at 4.954.
