Natural Gas Outlook: Reaching the Top, But will the Momentum Continue?

The price of natural gas fluctuated yesterday. Prices recently hit a one-month high and support continued Monday when top U.S. natural gas producer EQT Corp said it would cut net output by about 30 billion to 40 billion cubic feet in March due to low prices. However, gains were limited from the prospect of warm US winter temperatures, which will reduce heating gas demand, which keeps supply high.

The National Weather Service said Tuesday that forecasts for the central and eastern United States have warmed between March 10 and 14. in March. On the other hand, UK natural gas futures have risen to 70 pence a then, the highest in one month, due to lower wind farm output and cooler temperatures increasing demand for gas. North-west Europe is expecting a drop in temperatures, further driving up the need for gas for heating.

Meanwhile, UK storage facilities are currently nearly 50% full. Looking ahead, British energy supplier Centrica has agreed to purchase 1 million metric tons of liquefied natural gas from Spain’s Repsol between 2025 and 2027. The cargoes will be delivered to the Isle of Grain terminal in Kent in the South of England. In other news, Britain’s recent power capacity auction for 2027/28 secured a record high clearing price of £65 per kilowatt per year, indicating tight supply-demand dynamics in the UK electricity market.

Technical Outlook – Natural Gas

Natural gas halted its decline since February 19, 2024, recovering more than 19% from a low of 128.50 to a recent high of 165.50.

However, prices fell slightly yesterday to settle at 160.00, a 1.60% intraday gains.

On the above chart, prices trading above its short time consolidation zone and forming higher high candle stick since last two days. Also, prices trading above their 20 SMA.

Hence, its expected that momentum could be remain positive and a break above 165.50 will open the door for next resistance 175-180.00. Else, any dip towards 155-150 could attract some demand.

On the downside, crucial support is seen at 140.00 below it prices may retreat towards 125-110.00 again.

Commodity Samachar
Learn and Trade with Ease

Also Read: Tokyo CPI, BOJ Gov Ueda speaks & US services PMI in the spotlight? , Gold prices at lifetime highs, as outlook hits forecast levels

Recommended Read: Forex News Letter : US ISM Service Ready To Take The Spotlight?

Want help on your traders?

Chat with our Analyst