Natural gas prices at key support : Will it rebound?

Natural gas prices at key support : Will it rebound?

Natural gas prices were able to settle in the green, after four consecutive day’s fall. Furthermore, Natural Gas Prices found support after the EIA reported an unexpected decrease in inventories.

Last week, US utilities experienced a loss of 7 billion cubic feet (bcf) of gas into storage, contrary to market expectations of a 7 bcf increase. As a result, inventories reached an all-time high of 3.826 billion cubic feet (bcf), still above last year’s levels. In addition, weather forecasts for the next couple of weeks are calling for colder than expected temperatures and higher heating demand. Meanwhile, record volumes of gas continue to flow into US LNG export facilities, providing further support.

Although temperatures are expected to drop below average across most of Europe throughout the week and into the first few weeks of December, there has been little volatility in the market. And with temperatures set to drop even further into next week, we can expect to see an increase in demand for energy.

The anticipated cold snap, with temperatures dropping even further next week, is expected to boost energy demand.  

However, the current natural gas reserves in Germany and France are nearly full, with Italy’s reserves exceeding 97%.

In addition, rising German wind power is expected to significantly increase the continent’s power supply, with turbines expected to produce at almost record levels later this week.

Natural Gas Prices – Technical Outlook:

Natural prices turned lower from the 31 October 2023 peak 302.40, it made a low 235.70 yesterday, down almost 22%. Yesterday, prices bounced from it and settled at 240.40, up 0.71%.

After a steep fall since the start of the month, yesterday prices formed a hammer candlestick on the chart, which is indicating a reversal in near future. Hence, prices appear to set recovery from 238.5-240 levels and could test 246.50-265.

Alternatively, on the downside crucial support is seen at 229.50 and a break below it prices may crunch towards 220-215-208.

Commodity Samachar
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