Spot natural gas prices (CFDS ON NATURAL GAS) slightly decreased in their recent trading at the intraday levels, to record daily losses until the moment of writing this report, by -0.05%. It settled at the price of $8.622 per million British thermal units, after declining during yesterday’s trading by – 0.94%.
July gas futures settled at $8.609 per million British thermal units, down 24.1 cents on the day, spot month was down 11.3 cents on Friday, and August futures on Monday were down 24.8 cents at $8.619.
NGI’s Spot Gas National Avg spot gas prices went in another direction, buoyed by strong demand for near-term cooling in the US, rising 42.0 cents to $8.635.
Futures traded at a July high of $9,664 early last Wednesday, amid strong domestic and global demand for relatively modest US supplies. However, futures contracts have since struggled to gather and maintain momentum. It comes amid the uncertainty created by Wednesday’s explosion at the Freeport LNG export terminal.
Freeport officials have indicated that the station will remain offline for at least three weeks. However, market participants braced for a longer outage that could hamper US exports to Europe. Demand from the continent accelerated as countries there protested Russia’s invasion of Ukraine by backing off gas from Russia. They turned to US LNG to fill the gap, thereby boosting futures contracts for most of the spring.
The gas that would have been exported from Freeport is now available for local consumption or storage for the coming winter. This eased concerns about insufficient supplies to meet strong domestic demand for cooling in the summer, and for utilities’ need to store gas away from the winter heating season.
Technically, the price is trying to search for a bullish bottom to take as a base that might help it gain the necessary positive momentum to regain its recovery. This is despite the dominance of the main bullish trend in the medium and short term along a slope line, as shown in the attached chart. The continuation of the positive support traded above its simple moving average for the previous 50 days. In addition, we notice that the RSI reached oversold areas, exaggeratedly compared to the price movement.
Therefore, we expect the rise of natural gas to return during its upcoming trading, but first it should return to stability above the resistance level 8.870, after which it will target the pivotal resistance level 9.550.