Spot natural gas prices (CFDS ON NATURAL GAS) stabilized in the recent trading at the intraday levels, to achieve new daily gains until the moment of writing this report, by 1.49%. It settled at the price of $9.377 per million British thermal units, after it decreased during yesterday’s trading by - 1.66%.
US natural gas futures fell about 1% on Wednesday, down from a 14-year high hit in the previous session, due to expectations of cooler weather and lower demand for refrigerants over the next two weeks than previously expected.
This slight price drop came despite lower daily production, hotter-than-normal weather on the West Coast and Texas, and near-record world prices.
US gas prices have also been affected by the ongoing outage at the Freeport LNG export plant in Texas, which has left more US gas for utilities to pump into storage for the coming winter.
Wednesday's futures traders focused squarely on the next round of weekly government inventory data in the US Estimates ahead of the Energy Information Administration (EIA)'s official weekly inventory report on Thursday were wide-ranging, but hovered around the two figures of 22 billion cubic feet and 45 billion cubic feet. cubic feet with an average forecast of 32 billion cubic feet.
So far this year, the price of gas has risen during the first month by about 145% as higher prices in Europe and Asia keep demand for US LNG exports strong. Global gas prices have risen this year after supply disruptions linked to Russia's invasion of Ukraine on February 24.
Meanwhile, Russian gas exports through the three main lines have averaged about 2.5 billion cubic feet per day so far. Down from 2.8 billion cubic feet per day in July and 10.4 billion cubic feet per day in August 2021.
Natural Gas Technical Outlook
Technically, natural gas’s decline came yesterday as a result of the stability of the pivotal resistance level 9.600, to reap the profits of its recent rises. It is trying to gain positive momentum that might help it breach that resistance. This is in light of the dominance of the main bullish trend in the medium and short term along a slope line, as shown in the attached chart. The positive pressure of its trading continues above its simple moving average for the previous 50 days, in addition to the influx of positive signals on the relative strength indicators, despite reaching overbought areas.
- Our expectations indicate that the scenario of a rise in natural gas during its upcoming trading is likely.
- It is on condition that it first overcome the pivotal resistance 9.600 obstacle.
- After which it will target the resistance level 10.70.
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