- Spot natural gas prices (CFDS ON NATURAL GAS) rose slightly during their early trading on Monday.
- It achieved slight daily gains until the moment of writing this report, by 2.52%, settling at $ 3.334 per million British thermal units.
- This happened after it declined during Friday’s trading by 1. -1.81%. Over the past week, the price has fallen by -7.64%.
Weekly cash prices for natural gas and futures fell side by side during a brief week of trading after Monday's holiday in the US due to mild weather, weak demand, and strong production.
The February Nymex futures contract lost three out of four days over the past week, settling at $3.174 per million British Thermal Units to close trading on Friday, down about 10.1 cents on the day and 7% from the previous week's end.
Weather conditions during the recent period have been generally mild, with warm weather in the south and cool but above-freezing temperatures over large areas of the Midwest and East of the United States. The Rocky Mountains and parts of the West proved occasional exceptions with snow in the Mountain West and cold air in California after heavy rain earlier in the month.
Overall however demand has proven modest during a period when production has been holding steady at around 100 bcfd - near record levels - putting negative pressure on prices.
Earlier, the US Energy Information Administration (EIA) on Thursday announced a drawdown in inventories of 82 Bcf for the week ending January 13th. This followed a rare January injection of 11 Bcf reported a week earlier.
Natural Gas Technical Analysis
Technically, the price continues its decline amid the dominance of the bearish trend in the short term along a slope line. This is shown in the attached chart for a (daily) period, with the continuation of the negative pressure for its continuous trading below the simple moving average for the previous 50-day period. In addition to that, we notice the presence of negative signals with indices Relative strength, although it is stable in highly oversold areas.
Therefore, our expectations indicate a decrease in natural gas during its upcoming trading, as long as it stabilizes below the 3.618 resistance level, to target the first support level at 3.098.
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