Spot natural gas prices (CFDS ON NATURAL GAS) advanced during their early trading on Thursday, to achieve slight daily gains until the moment of writing this report, by 0.54%. It settled at $3.723 per million British thermal units, after rising by 3.41% during yesterday's trading.
US natural gas futures rose nearly 1% on Wednesday, after touching a one-year low in the previous session on expectations that the weather will turn from warmer-than-usual now to cooler-than-normal in late January.
Early Wednesday, the contract fell more than 5% to an 18-month low of $4,422 per million British thermal units on expectations of lower heating demand next week than previously expected, and with a growing number of analysts expecting Freeport to delay LNG gas export in Texas.
Meanwhile, Russia's GAZP said it would ship about 35.5 million cubic meters of gas to Europe via Ukraine on Thursday, in line with similar levels reported in previous days. However, it was down about 15% on daily shipments seen recently.
Natural Gas Technical Analysis
- Technically, the rise in natural gas came as a result of the stability of the pivotal support level 3.618, which gave it some positive momentum that helped it compensate for part of its previous losses.
- At the same time, we see it trying to drain some of its clear selling saturation with the relative strength indicators, especially with the start of signals coming in.
- The positive ones, all of this comes in light of the dominance of the bearish corrective trend in the short term along a slope line, with the continuation of the negative pressure for its trading below the simple moving average for the previous 50-day period, as is evident in the attached chart for a (daily) time period.
Therefore, our expectations suggest that natural gas will return to decline during its upcoming trading, especially if it breaks the 3.618 pivotal support, to then target directly the first support levels at 3.098.
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