- Spot natural gas prices (CFDS ON NATURAL GAS) advanced during their early trading on Wednesday.
- It achieved new and slight daily gains writing this report, by 0.78%, to settle at $ 2.709 per million British thermal units.
- This happened after rising during yesterday’s trading and for the second day respectively, at a rate of 3.82%.
Nymex gas futures for March were up 12.7 cents to $2,584 per mmbtu, while April futures were up 12.9 cents to $2,664.
Natural gas futures posted another price gain on Tuesday, with analysts largely seeing the move higher as technically driven rather than any significant change in the supply-demand balance.
Meanwhile, the US Energy Information Administration (EIA) has revised Henry Hub's price forecast for 2023, modeling an average price of $3.40. This is a 30% drop compared to the agency's forecast just a month earlier.
In its latest Short-Term Energy Outlook published on Tuesday, the Energy Information Administration estimated that average dry natural gas production in the United States would reach 100.2 billion cubic feet per day in January, a new record. The agency said production is on track to average 100-101 billion cubic feet per day this year.
Natural Gas Technical Analysis
Technically, the price's rise came as an attempt to compensate for some of the previous losses, after it was able to gain some support based on the 2.432 support level, this level that we had referred to in our previous reports, supported by the influx of positive signals in the relative strength indicators, after reaching earlier strong areas.
This happened considering the dominance of the bearish trend in the short term and along a slope line, as shown in the attached chart for a period (daily). Negative pressure continued for its trading below the simple moving average for the previous 50-day period.
Therefore, our expectations suggest that natural gas will return to decline during its upcoming trading, as long as the 3.098 resistance remains stable, to target once again the 2.432 support level, in preparation for breaking it.
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