Natural Gas Technical Analysis: Price is Rising Slightly

Our expectations remain neutral.

Spot natural gas prices (CFDS ON NATURAL GAS) increased in their recent trading at the intraday levels, to achieve slight daily gains until the moment of writing this report, by 1.34%. It settled at the price of $6.440 per million British thermal units, after it declined during trading yesterday and today by – 3.30%.

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Nymex natural gas futures led by the August contract failed to hold on to early gains yesterday, amid weak demand ahead of the weekend. August Nymex futures settled at $6.498/MMBtu, down 7.2 cents on the day, while September futures were down 6.4 cents at $6.493.

Spot gas prices NGI’s Spot Gas National Avg posted moderate gains amid rising temperatures especially on the US East Coast, rising 13.0 cents to $6,610.

The market focused on stocks throughout the spring and summer after the cold winter drained stocks. As Russia’s war on Ukraine has led to stronger calls for US LNG, an explosion at Freeport LNG earlier this month appears to be alleviating supply concerns, although the 2 billion cubic feet per day (bcfd) that would feed the shutdown terminal Usually now available to meet demand or injected into storage.

Last week, the market got its first glimpse of the impact of the Freeport outage on supply in the US. In a surprise report, the Energy Information Administration (EIA) said inventories for the week ending June 17 rose by 74 billion cubic feet.

Technically, the early rise in spot natural gas prices comes as a result of its dependence on the pivotal support level 6.361, which gained it some positive momentum. This is especially with the start of the influx of positive signals on the relative strength indicators. This in light of the dominance of the main bullish trend in the medium term along a trend line, as shown in the graph. The facility is for a period of time (daily), but it continues to suffer from the continuation of negative pressure for its trading below the simple moving average for the previous 50 days. It is also under the control of a bearish corrective wave in the short term.

Therefore, our expectations remain neutral, waiting for the stock’s behavior towards the pivotal support level 6.361. In the event of this level consolidation, it will push the price upwards to target the resistance level 7.368. However, if the price breaks this support, it will increase the negative pressure on its upcoming trades, to directly target the support level 5.660.