Natural gas prices recovered from a near four-month low on Wednesday and closed up more than 12 percent in the MCX sector. There was a brief hedge in prices when Atmospheric G2 said updated forecasts show the US warming by 2-6. September, the need for energy providers to control the winds will increase.
This is the biggest daily jump since July 22, 2024. Demand remains depressed, with Europe and China showing lower demand for liquefied natural gas (LNG). Meanwhile, New Zealand will quickly lift the LNG import ban and accelerate LNG projects to solve the current energy crisis.
In addition, the US Dollar Index (DXY), which tracks the greenback against six major currencies, is still struggling to recover from one of its worst weeks in recent memory. to the year last week. The US dollar appears to be supported and may see a weaker entry on concerns ahead of Nvidia’s earnings later this Wednesday after the US close. Failures from the technical team can be sold in stock, bringing in more dollars.
Bloomberg reports that Norwegian gas exports to Europe are at a two-month low. The main reason for the drop in supply is seasonal maintenance in Norway.
Reuters reports from Australia that Inpex has canceled at least four LNG shipments scheduled for next month from its Ichthys facility due to an ongoing outage. Recent retaliations and now the introduction of a new ballistic missile for Ukraine could mean that Russian President Vladimir Putin could even consider completely cutting off Europe from its gas supply.
Natural Gas prices have eased after a rather volatile summer. With a ceasefire deal on the table for the Gaza region and Israel, combined European gas storage levels above 90% and sluggish demand in China, not many catalysts exist for gas prices to substantially surge. It looks like Gas prices will be stuck in this sideways action for some time until a new catalyst comes in to shake things up.
Technical Outlook : Natural Gas Futures
Yesterday, natural gas flowed to the lowest level in four months. Prices rose above 180.30 and settled at 178.80, an increase of 12.74%.
On August 20, prices continued to turn negative, reaching 156.70 on Thursday. Yesterday’s price action led to the formation of a long candlestick, while a positive RSI divergence was observed at the same time. Both point to a positive move in the near future
However, prices should break above 185.50 to test 192-198.00. Otherwise, a short-term dip to 168-165 is likely to attract selling. On the downside, solid support is seen at 155 and a break below can only test prices at 142.00-148.
Happy Trading!
Commodity Samachar
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