- Spot natural gas prices (CFDS ON NATURAL GAS) fell during their early trading on Wednesday.
- It recorded daily losses until the moment of writing this report, by -4.72%.
- It settled at $4.924 per million British thermal units, after rising slightly during yesterday’s trading by 1.29%.
US natural gas futures strengthened on Tuesday, as winter storms across the country curtailed gas production over the weekend, offsetting pressure from expectations of cooler weather and lower demand over the next two weeks.
Data provider Refinitiv showed that average gas production in the lower 48 states in the United States fell to 80.4 billion cubic feet per day on Saturday. This is the biggest drop in daily production since the February freeze of 2021 when a winter storm froze gas supplies in Texas and forced the operator of that state's electrical grid to force a power outage.
Daily US demand from the four largest gas-consuming sectors, residential, commercial, power, and industrial, hit an all-time high of 148.5 billion cubic feet on Friday, according to Refinitiv data.
Meanwhile, data from pipeline operator Cascade showed an increase in eastbound gas flows on the Yamal-Europe pipeline to Poland from Germany on Wednesday morning.
Natural Gas Technical Analysis
Technically, natural gas resumed its decline amid the dominance of the bearish corrective trend in the short term and along a slope line, as shown in the attached chart for a (daily) period of time. Negative pressure continued for its trading below the simple moving average for the previous 50-day period, in addition to the presence of negative signals in strength indicators.
Therefore, our expectations are still negative towards the upcoming movement of natural gas in the short term, especially as long as it stabilizes below the 5.310 resistance level, targeting the 4.200 support level.
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