Global natural gas prices have surged to an 11-month high, driven by colder weather forecasts and a drop in wind power generation. Britain’s gas demand is expected to spike significantly, with a marked increase forecast for the next day and further rises anticipated for the upcoming workweek.
The colder weather and heightened demand have resulted in steady withdrawals from gas storage. With limited gas storage capacity and heavy reliance on European infrastructure, the UK is particularly vulnerable to potential supply disruptions.
The market is also eyeing the possible impact of Donald Trump’s re-election, as his policies on Ukraine and U.S. LNG exports could influence long-term supply trends.
Meanwhile, U.S. natural gas futures have surged more than 6%, with Gulf of Mexico production still disrupted due to Storm Rafael. The U.S. Bureau of Safety and Environmental Enforcement (BSEE) reported that 482,790 barrels of oil and 310 million cubic feet of natural gas remain shut in, representing over 25% of oil and 16% of natural gas output.
Furthermore, 37 out of 371 manned platforms (around 10%) are still evacuated, and two drilling vessels have been displaced. Total production losses so far have reached 2.07 million barrels of oil and 1.12 billion cubic feet of natural gas.
Despite being downgraded to a tropical storm, Rafael is expected to linger in the central Gulf before shifting south and southwest early in the week, according to the U.S. National Hurricane Center.
Technical Outlook – Natural Gas Futures
Natural gas prices have been enjoying its recovery rally since the last three week. Yesterday, prices made a high of 249.70 and settled a 247.80, up 10.23%.
On the above chart, prices forming a cup and handle pattern which is indicating prices on the verge of a strong bullish momentum. However, prices would need to break above 252.50 in order to confirm a bullish move towards 260-266 in the near future.
Else, any dip towards 238-235 is expected to attract buying activities with an immediate support 228.50-218.50.
Until then, Happy Trading!
Commodity Samachar Securities
We Decode the Language of the Markets
Also Read:Â UK Jobs report, India CPI in Focus today , Forex Focus: Oil Drops as China Stimulus Falls Short, Dollar Up
Recommended Read: The Finale of the US Elections 2024: What Lies Ahead for the Commodities Market?
Want Help On Your Trades ?
chat with RM