- Spot natural gas prices (CFDS ON NATURAL GAS) continued to decline in recent trading at intraday levels, to record daily losses until the moment of writing this report.
- It fell by -0.36%, to settle at the price of $ 6.400 per million British thermal units, after its decline during yesterday’s trading by -4.43%.
- US natural gas futures fell nearly 4% on Monday, reaching their lowest level in nearly 12 weeks, on record production, expectations of milder weather, and a slowdown in demand over the next two weeks. This is due to persistent storm-related outages and lower LNG exports ( LNG).
Demand for gas from electric utilities has diminished, with some 560,000 Florida homes and businesses without power after Hurricane Ian hit the state on September 28-29.
US futures are still up about 75% so far this year, as rising global gas prices fueled demand for US exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine on February 24.
US gas futures lag global prices because the US is the world's largest producer with all the fuel it needs for domestic use. Capacity constraints and freeport outages prevent the country from exporting more Natural Gas.
Meanwhile, data from pipeline operator Cascade showed that gas flows destined for eastern Europe fell to zero again on Tuesday. This happened on the Yamal-Europe pipeline bound for Poland from Germany after a brief resumption in the early hours of the morning.
Sweden sent a diving ship on Monday to the site of Nord Stream pipelines that blew up last week after explosions in the region. Their purpose is to investigate an accident that has heightened tension in Europe's energy crisis.
Natural Gas Technical Analysis
Technically, the price is affected by a negative technical structure formed earlier in the short term, which is the head and shoulders pattern as shown in the attached chart for a period (daily). Negative pressure for its trading below the simple moving average for the previous 50 days continued, as we notice in the midst of that the re-emergence of the crossover Negative RSI indicators, despite their stability in oversold areas.
Therefore, our expectations indicate more decline for natural gas during its upcoming trading, especially in case it breaks the current 6.400 support level, and then targets the 5.554 support level.
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