Natural Gas Technical Analysis: Price Declines as Winter Ends – 14 March 2022
We expect the gas to rise during its upcoming trading.
Spot natural gas prices (CFDS ON NATURAL GAS) decreased during the recent trading at the intraday levels, to record daily losses until the moment of writing this report, by -4.44%. It settled at the price of $4.619 per million British thermal units, after rising in trading on Friday by 2.50 %, during the past week, the price decreased by -3.48%.
With spring approaching, April futures on Nymex fell for the first three sessions of last week before posting gains on Thursday. The spot month settled at $4,725/MMBtu to close out the trading week on Friday, up 9.4 cents on the day but down 6% from the end of the previous week.
Demand was flat during the week as the freezing weather system covered large swaths of the central US early in the period, bringing cold rain and freezing temperatures. Another blast of winter ensued late in the trading week and was expected to head east over the weekend, with more warmth expected in the second half of March.
Markets are concerned that Russia’s crude and natural gas exports may be halted, amid pipeline damage from bombings or Western sanctions. US President Biden banned Russian energy imports over the past trading week, calling them a necessary deterrent to slowing Russia’s “war machine”.
European countries that depend on Russian oil, especially natural gas, have not yet followed suit. Russian gas continued to flow to Europe at a steady rate during the week. This put a pause in the sudden increases in commodity markets and enabled US gas traders to focus on increasingly negative domestic demand fundamentals.
Technically, the price shows more positive signs despite its recent decline, as the price moves along a major bullish slope line in the medium term, as shown in the attached chart for a (daily) period, supported by its continuous trading above its simple moving average for the previous 50 days.
In addition, we notice the beginning of a positive crossover on the RSI indicators, after reaching oversold areas.
Therefore, we expect the gas to rise during its upcoming trading, to target the important resistance level 4.954, in preparation for attacking it.