- Spot natural gas prices (CFDS ON NATURAL GAS) stabilized at a rise in early trading on Tuesday.
- It recorded slight daily losses until the moment of writing this report, by -0.46% and settling at a price of $5.563 per million British thermal units.
- This happened after falling by 0.96%. during yesterday’s trading.
U.S. natural gas futures settled on Wednesday, as market expectations balanced between expectations of increased demand once LNG export terminals are up and running after outage due to maintenance work, versus expectations that demand will remain low. The weather remains mild through early November onwards. the least.
Traders also noted that a mix of record production, mild weather and lower LNG exports have already allowed utilities to pump more gas into storage than usual over the past month. This raised inventories to healthy levels for the winter.
However, traders noted that futures prices will soon rise once December becomes the first month after the market closes on Thursday. This was in part because LNG exports are expected to rise to record levels after the return of two liquefaction plants.
Gas futures have been extremely volatile in recent weeks with prices up about 14% so far this week, after collapsing about 59% to a seven-month low over the previous nine weeks. Utilities boosted the amount of gas stored to healthy levels.
Natural Gas Technical Analysis
Technically, the bearish corrective trend dominates the movement of natural gas in the short term. This is confirmed by its impact on the breach of a major bullish slope line earlier in the medium term, with the negative pressure continuing for its trading below the simple moving average for the previous 50 days, as shown in the attached chart for a period. (Daily). In addition, we notice that the RSI indicators have reached overbought areas, exaggeratedly compared to the price movement, to suggest the beginning of a negative divergence.
Therefore, our expectations suggest a decline in natural gas during its upcoming trading, especially if its stability returns below the level of 5.455, to target the 4.214 support level.
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