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Natural Gas Technical Analysis: Prices Decline, Expecting Mild Weather – 15 March 2022

We expect the rise of natural gas to return during its upcoming trading.

Spot natural gas prices (CFDS ON NATURAL GAS) declined during the recent trading at the intraday levels, to record daily losses until the moment of writing this report, by -2.67%. It settled at the price of $4,594 per million British thermal units, after declining in yesterday’s trading by -2.32%.

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Natural gas prices faltered early in the week on Monday, as weather forecasts continued to show mild conditions until late March, with Nymex gas futures for April down 6.7 cents a day and settling at $4,658.

Weather forecast trends over the weekend were bearish, with forecast models reporting comfortable temperatures for most of the lower 48 states in the US starting Tuesday and continuing into late this month, according to NatGasWeather.

The weather forecast company said temperatures are expected to be “very comfortable” between next Thursday and March 23, with weak demand likely to “build the first weekly storage of the year”. “With a warmer-than-normal pattern expected to continue from March 24 to 31, there is likely to be a further increase in the US Energy Information Administration’s (EIA) post-stocking reports.

Amid this, the demand for US LNG exports is expected to remain high throughout the coming period, given the uncertainty over global supplies imposed by the Russian invasion of Ukraine.

Over the course of nearly three weeks of war, US LNG volumes were hovering around 13 billion cubic feet and close to capacity.

Technically, the price continues attempts to gain positive momentum that may help it recover and rise again. This is in light of the dominance of the main bullish trend in the medium term along a slope line, as shown in the attached chart for a period of time (daily), with the continuation of positive support for its trading above its simple moving average for a period In the previous 50 days. In addition, we notice the start of positive signals on the RSI indicators, after they reached oversold areas.

Therefore, we expect the rise of natural gas to return during its upcoming trading, to target once again the important resistance level 4.954, in preparation for attacking it.

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