Spot natural gas prices (CFDS ON NATURAL GAS) rose during the recent trading at the intraday levels, to achieve new daily gains until the moment of writing this report, by 3.16%. It then settled at the price of $4.835 per million British thermal units, after rising during yesterday’s trading by a rate of 4.20%.
Natural gas prices rebounded on Tuesday amid the prospect of increased demand for US liquefied natural gas (LNG) exports. This is on the back of Russia's invasion of Ukraine and the specter of European supply disruptions as war erupted on its seventh day.
April Nymex gas futures settled at $4,573, up 17.1 cents on the day, spot month had lost 6.8 cents the day before, May contract rose 17.8 cents to $4,598 on Tuesday.
While NGI's Spot Gas National Avg went in the opposite direction, posting losses of about 11.5 cents to settle at $4,280 amid modest demand driven by weather forecasts. The day before, it fell by more than $1,500.
European natural gas remained as high on Tuesday as it has for several days amid concerns that Russia will reduce its supplies to the continent. American and European leaders stiffened a range of economic sanctions against Russia in the days after the start of the war. Traders are concerned that the Kremlin may respond by cutting off gas supplies. Europe relies on Russia for about a third of its gas needs, and much of that fuel is delivered through pipelines that run through Ukraine.
Analysts at Rystad Energy said on Tuesday that damage to infrastructure from Russian bombing and missile strikes on Ukraine could hamper the flow of gas.
Technically, the gas continues to rise alongside a major bullish trend line over the medium term, as shown in the attached chart for a (daily) period. It is supported by its continuous trading above its simple moving average for the previous 50 days. In addition to that, we notice the influx of positive signals on the relative strength indicators.
Therefore, our positive expectations remain surrounding natural gas prices during its upcoming trading. We expect more rise to target the first nearby resistance levels 4.954, in preparation for attacking it.
