- Spot natural gas prices (CFDS ON NATURAL GAS) decreased slightly during its early trading on Tuesday, to record new daily losses until the moment of writing this report, by -1.51%.
- It settled at $3.993 per million British thermal units, after incurring sharp losses during trading.
- Yesterday, for the fourth day in a row, it increased by -9.86%.
US natural gas futures fell more than 10% to a 10-month low on Tuesday, as expectations of mild weather and lower heating demand in January force some in the market to push back on hopes of extreme cold in the coming weeks.
Also, traders are touching every new news about the Freeport LNG terminal, because the demand for gas will rise once the plant is back in operation. The Freeport terminal can convert about 2.1 billion cubic feet per day of gas, or about 2% of the daily production of the United States, into liquefied natural gas ready for export.
Meanwhile, Gazprom's supplies to Europe via Ukraine fell 10.4% on Wednesday, with GAZP saying it would ship about 37.8 million cubic meters of gas to Europe via Ukraine on Wednesday, down 10.4 percent from 42.2 million cubic meters on Tuesday.
Gazprom has been supplying more than 40mcm of gas per day via this route in recent months, and the last time it supplied less than 40mcm was on July 11 when it shipped 39.4mcm.
Natural Gas Technical Analysis
Technically, natural gas continues its decline in light of the dominance of the bearish corrective trend in the short term, and its trading along a slope line, as shown in the attached chart for a (daily) period. This happened amid the continuation of the negative pressure for its trading below the simple moving average for the previous 50-day period, in addition to that we note the presence of Negative signs on the RSI indicators as well, although they reached highly oversold areas.
Therefore, our negative expectations surrounding natural gas are still valid until that moment. We expect the price to continue declining during its upcoming trading, as long as the 4.741 resistance remains intact, to target the important 3.618 support level.
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