- Spot natural gas prices (CFDS ON NATURAL GAS) stabilized at an increase in the recent trading at the intraday levels, achieving slight daily gains.
- Now of writing this report, the index rose by 0.08%, settling at $8.418 per million British thermal units.
- In the previous session it rose by 4.23%, posting gains for the third day in a row.
Natural gas futures rose on Monday for the third consecutive session, driven by escalating concerns about insufficient winter storage. The October gas futures contract on NYMEX jumped 25.3 cents a day and settled at $8,249 per million British thermal units. The November contract rose 24.3 cents to $8.287.
Spot prices for NGI's Spot Gas National Avg also advanced, increasing about 18.5 cents to $7,620.
The US Energy Information Administration (EIA) reported last Thursday that 54 billion cubic feet of natural gas was pumped into storage for the week ending September 2.
The result came in below the five-year average of 65 billion cubic feet, and left stocks well below historical standards. Working gas in storage rose to 2,694 billion cubic feet, according to the Energy Information Administration. However, inventories were 222 billion cubic feet less than the previous year and 349 billion cubic feet less than the five-year average.
Production has increased significantly in recent weeks to meet strong domestic demand and increased demands from Europe and Asia for US exports. Meanwhile, the demand for cooling is fading with the advent of autumn weather in the northern regions.
So far this year, gas futures are up about 123% as prices in Europe and Asia continue to demand US LNG exports. Global gas prices soared due to supply disruptions and sanctions linked to Russia's invasion of Ukraine on February 24.
The rise in gas futures came despite the ongoing outage at the Freeport Liquefied Natural Gas (LNG) export plant in Texas, which left more gas in the US for utilities to pump into storage for the coming winter.
Natural Gas Technical Analysis
Technically, the price received a strong positive impetus after relying on the support of its simple moving average for the previous 50 days. We are considering 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, and noticed in the midst of that the start of positive signals.
The index is showing relative strength indicators, after reaching oversold areas, forming what is known as positive divergence, which increases positive pressure on the upcoming price movements.
Therefore, our expectations indicate more rise for natural gas during its upcoming trading, if the 8.00 support remains intact, to target the first resistance level at 8.850.
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