- Spot natural gas prices (CFDS ON NATURAL GAS) settled lower during its early trading on Monday, achieving slight daily gains until the moment of writing this report, by 0.37%.
- It settled at a price of $2.437 per million British thermal units, after declining during Friday’s trading. For the third consecutive session, it increased by -2.18%.
- Over the past week, the price fell by -19.12%, its worst weekly percentage performance since December. This came after two weeks of bullish price movement that quickly reversed.
A mild start to March continued to pressure spot natural gas prices during the trading week of March 6-10, as just a week after reaching $3.00 per MMBtu, the April Nymex gas futures contract closed at 2,430. dollars.
Meanwhile, European natural gas prices rose significantly towards the end of last week, as there are many catalysts for a move higher, including the ongoing strike in France that affects operations at 4 LNG import terminals. Also in France, EDF discovered some defects in two of its nuclear reactors, which led to its shutdown.
These fears finally coincide with a cold snap in large parts of Europe, but for now, nonetheless, EU gas storage remains strong with close to 56% full, well above the 5-year average of 36% full at this time of year.
Earlier, the US Energy Information Administration (EIA) said that inventories for the week ending March 3 fell by 84 billion cubic feet, which was in line with expectations but below the historical draw for this time of year. Last year, EIA data recorded a withdrawal of 126 billion cubic feet for the same week, while the five-year average withdrawal was 101 billion cubic feet.
Natural Gas Technical Analysis
Technically, the main bearish trend dominates the movement of natural gas in the medium and short term and along a slope line, as shown in the attached chart for a (daily) period of time. With the negative pressure continuing for its trading below the simple moving average for the previous 50-day period, in addition to that, we notice the presence of negative signals with indicators Relative Strength, after earlier reaching highly overbought areas.
Therefore, our expectations indicate a further decline for natural gas during its upcoming trading, especially as long as it stabilizes below 2.748, targeting the psychological support level of 2.00.
