Natural Gas Technical Analysis: Price Settles Down – 09 March 2022
We still expect the rise of natural gas to return during its upcoming trading.
Spot natural gas prices (CFDS ON NATURAL GAS) slightly increased during the recent trading at the intraday levels, to achieve slight daily gains until the moment of writing this report, by 0.17%. It settled at the price of $4.658 per million British thermal units, after declining during yesterday’s trading by an amount of -4.75%.
Natural gas futures fell for a second day in a row, as traders continued to focus on bearish shifts in domestic weather forecasts even as the war in Ukraine and Western sanctions against Russia threaten to send global commodity prices to record levels.
Nymex natural gas futures for April settled at $4.527 per million British thermal units, down 30.6 cents on the day.
NatGasWeather attributed the declines to an “increasingly bearish setting” in its weather forecast for the next week. US and European weather models extended warmer trends on Tuesday, according to the company.
However, even as the downside to prices appeared, Russia’s invasion of Ukraine remains a source of uncertainty and destabilizing markets, the company said.
NGI estimates showed that US exports of liquefied natural gas (LNG) were hovering around 13.5 billion cubic feet for most of March, near record levels amid strong demand from Europe.
Meanwhile, US President Joe Biden on Tuesday banned imports of Russian oil and natural gas, a move punctuated by already severe sanctions against the Kremlin and the prospect of higher energy prices amid the crisis. Biden called it “another powerful blow” against Russian President Putin’s “war machine” in response to its unprovoked attack on Ukraine. He also cautioned that “defending freedom comes at a cost” and “it will also cost us” in the form of higher prices for oil and gasoline – and possibly higher costs for natural gas.
Technically, the price is retracing to search for a bullish bottom to take as a base that may help it gain the necessary positive momentum to regain its recovery and rise again. At the same time, it is trying to discharge overbought, which was evident in the relative strength indicators. This is considering the dominance of the main bullish trend in the medium term along with a slope line, with the positive pressure of its trades continuing above its simple moving average for the previous 50 days.
Therefore, we still expect the rise of natural gas to return during its upcoming trading, as long as the support level 4.214 remains intact, to target the important resistance level 4.954, in preparation for attacking it.