Natural gas prices managed to recover from yesterday’s lows. Prices recovered after Norwegian grid operator Gassco confirmed the current outage would be short-lived. Earlier this Monday, gas prices rose on general risk as Norway had to report an unexpected power outage.
That is why it is very difficult for Europe to predict whether it will refuel before the heating period, because gas flows to Europe are very unpredictable.
Meanwhile, the US Dollar Index, which tracks the Greenback’s value against six major currencies, slipped from near to its June high, where it roughly closed at the end of last week. However, there is a risk for a quick correction as the US Dollar is near the feared 160.00 level against the Japanese Yen (JPY), a level at which the Japanese government intervened in the past. The last time the government intervened, the Japanese Yen appreciated over 5% against the Greenback with a ripple effect into the DXY, which dropped nearly 2% on the back of it.
Additionally, Russia is going around the Arctic Sea quicker than expected, with Liquefied Natural Gas (LNG) tanker Eduard Toll passing through the Northern Sea Route. This is the quickest way for Russia to get LNG to Asia.
Norwegian network operator Gassco reported an outage at the Hammerfest LNG Plant on Monday, according to Bloomberg. Although the outage should be solved during the day, it again shows how unreliable the current Gas flows from Norway into Europe are.
Japan is buying into Texas shale Gas, with Mitsui & Co Limited, buying some acres to excavate for drilling. The site should be operational by 2026. More good news for Europe with UK’s Easington terminal set to open on June 27th, a day earlier, Reuters reports.
Technical Outlook: Natural Gas
Natural gas prices rebounded from the intraday lows 221.20 and made a high 232.20 before closing of 229.60, up 1.64%.
Formation of a bullish engulfing candle stick is indicating for an upside momentum in a near future. However, prices would need to cross the immediate hurdle of 235 in order to test next resistance 240-245.00.
On the downside, support is seen at 220-210.50.
Happy Trading!
Commodity Samachar
Learn and Trade with Ease
Also Read: Economic News: Japan, Canada CPI, US Buyer Sentiment Focus Nifty Bounces Back! Investor Confidence Returns After Dip
Recommended Read: Going ‘All In’ for ‘Made in India’: What’s the Buzz Among American Consumers ?
Want help on your Trade?
Chat with our Analyst