Natural Gas At Key Resistance – Will It Break or Not ?

Natural Gas At Key Resistance - Will It Break or Not ?

Natural gas prices rose more than half a percent, extending the previous day’s rally. Prices were supported by colder weather forecasts in the US, which could increase demand for gas heating. Maxar Technologies announced Monday that cooler weather is forecast for the western and central United States.

Nat-gas prices have collapsed this year, with nearest-futures (NGJ24) posting a 3-3/4 year low last Tuesday as an unusually mild winter curbed heating consumption for gas and pushed inventories well above average. As of March 29, US inventories were +38.9% above their 5-year seasonal average, signalling abundant supplies.

Nat-gas prices are also under pressure after the Freeport LNG gas export terminal in Texas on March 1 shut down one of its three production units due to damage from extreme cold in Texas. The unit recently reopened on a partial basis. However, Freeport said that once the production unit is fully reopened, the other two units will be taken down for maintenance, and all three units will not return online until May. The lack of full capacity of the Freeport export terminal limits US gas exports and boosts US gas inventories.

Last Thursday’s weekly EIA report was bearish for gas prices since nat-gas inventories for the week ended March 29 fell by -37 bcf, a smaller draw than expectations of -42 bcf, although a bigger decline than the 5-year average decline of -1 bcf for this time of year. As of March 29, ng inventories were up +23.4% y/y and were +38.9% above their 5-year seasonal average, signaling ample ng supplies. In Europe, gas storage was 60% full as of April 7, above the 5-year seasonal average of 42% full for this time of year.

Technical Outlook – Natural Gas

Natural gas prices were continued traded positive, yesterday prices gained 0.65% and after hitting a day’s high 160.2 settled at 155.10.

Since 28 March 2024, prices found support from 140.00 and recovered towards 160.2. On the above chart, prices trading near to massive resistance 160.50 and a break above will open the door for next resistance 175.00-185.00.

On the downside, crucial support is seen at 140.00 below it prices may retreat towards 132.00-125.00

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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