Natural Gas Technical Analysis: Price Extends its Gains – 07 March 2022
We expect the rise of natural gas to continue during its upcoming trading.
Spot natural gas prices (CFDS ON NATURAL GAS) rose during the recent trading at the intraday levels, to achieve new daily gains until the moment of writing this report, by 4.19%. It settled at the price of $5.216 per million British thermal units, after rising during Friday’s trading by amounting to 3.86%. During the last week the price increased by 9.25%.
Cold temperatures permeated most of the Midwest and Northeast in the United States supporting rising demand, and by midweek, concerns about the Russo-Ukrainian war had boosted almost all commodities, including natural gas prices.
As Russia advanced in its invasion of Ukraine during the week, concerns about a potential energy crisis mounted, and natural gas futures contracts on Tuesday and Wednesday posted a two-fold advance. The instant month earned over 30 cents over the two days.
Intense market uncertainty due to heightened Russian military operations in Ukraine and similar escalating risks with sanctions may soon include energy exports. It has fueled the increase, as traders have been focusing on the growing possibility of gas sanctions each day the offensive continues.
Already the United States and European countries have imposed severe sanctions on the Russian economy, limited new deliveries of oil and gas, and analysts said direct sanctions against the current flows of gas have appeared on the table. If shipments of Russian gas to Europe are cut off, the continent will inevitably demand more American exports.
Secretary of State Anthony Blinken said Sunday that the United States is talking to its allies about a possible ban on Russian oil imports, indicating that the situation has changed from last week. The White House was wary of taking any step that could raise the price of oil further and lead to higher gasoline prices for consumers. Gas prices have already reached levels not seen since 2008 on Sunday.
Technically, the price succeeded in its recent trading in breaching the current resistance level 4.954. This is considering the dominance of the main bullish trend in the medium term along a slope line, with the continuation of positive pressure for its trading above its simple moving average for the previous 50 days. We also notice the influx of positive signals in the relative strength indicators, despite reaching highly saturated areas with purchases.
Therefore, we expect the rise of natural gas to continue during its upcoming trading, especially as long as its stability is above the level of 4.954, to target the important resistance level 5.710.