Spot natural gas prices (CFDS ON NATURAL GAS) slightly rose in early trading on Tuesday, achieving new daily gains until the moment of writing this report. It went up by 0.91% to settle at a price of $5.197 per million British thermal units, after rising during yesterday’s trading by 3.29 %, thus breaking a series of losses that lasted for six consecutive sessions, and after last week's loss of 23%.
Yesterday, US natural gas futures jumped 5%, after falling to a seven-month low earlier in the session, on the back of a technical recovery and expectations of higher demand. LNG exports increased once export factories come out of maintenance outages in the the coming weeks.
Major LNG outages include Berkshire Hathaway Energy's Oct. 1 shutdown of its Cove Point LNG export plant, which has a capacity of about 0.8 billion cubic feet per day, and Freeport’s terminal in Texas for unplanned operation after an explosion on June 8. / June. Freeport expects the facility to return to at least partial service in early to mid-November.
Natural Gas Technical Analysis
Technically, the price is trying with its recent rise to compensate for part of what it incurred from previous losses. At the same time, it is trying to dispose of some of its clear selling saturation with the relative strength indicators, especially with the start of the influx of positive signals from them, in light of the dominance of the bearish corrective trend in the short term and affected by the breaking of a major slope line. It is bullish on the medium term earlier, as shown in the attached chart for a period (daily), and at the same time it suffers from the continuation of negative pressure for its trading below the simple moving average for the previous 50 days.
Therefore, our negative expectations surrounding natural gas are still valid, as we expect a return of the price decline during its upcoming trading, especially throughout its stability below the 5.455 resistance level, to target the 4.214 support level.
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