Trading

Price is Trying to Gain

The bullish price action stemmed from concerns about possible US rail workers’ strike in early December, which was exacerbated by weak market participation as many traders exited the market for a long weekend.

Spot natural gas prices (CFDS ON NATURAL GAS) declined in early trading on Monday, to record new daily losses until the moment of writing this report, by -0.83%. It settle at a price of $6.654 per million British thermal units, after declining during Friday’s trading by -5.35%, during the past week, natural gas recorded a gain of 8.17%.

US natural gas futures fell nearly 4% on Friday, with the upcoming contract expiring next month and expectations of less cold weather over the next two weeks. Strong gains earlier in the week managed to lead the market to post its biggest weekly gain in three months.

The bullish price action stemmed from concerns about possible US rail workers’ strike in early December, which was exacerbated by weak market participation as many traders exited the market for a long weekend.

The US Energy Information Administration said on Wednesday that utilities pulled 80 billion cubic feet of gas from storage during the week ending November 18, slightly less than expected.

Meanwhile, British and Dutch gas prices were mixed due to profit-taking after the recent uptrend, EU energy ministers failed to agree on a gas price ceiling, and heating demand increased in less cold and windy weather.

Separately, Russia’s Gazprom said it would ship about 42.6 million cubic meters of gas to Europe via Ukraine on Sunday, a level similar to recent days.

Natural Gas Technical Analysis

  • Technically, the price, with its recent declines, is trying to reap its profits and gain some positive momentum that may help it recover and rise again.
  • At the same time, it is trying to drain its clear overbought with the relative strength indicators, especially with the start of negative signals from them, considering being affected by breaching a bearish corrective slope line.
  • Earlier, with the continuation of the positive support for its trading above its simple moving average for the previous 50 days, as shown in the attached chart for a (daily) period.

Therefore, our expectations suggest a return to the rise of natural gas during its upcoming trading, especially throughout its stability above the 6.412 support level to target the 7.788 resistance level.

Natural Gas

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