Natural Gas Technical Analysis: The Price Is Deepening Its L| MENAFN.COM

Tuesday, 07 February 2023 05:06 GMT

Natural Gas Technical Analysis: The Price Is Deepening Its L

(MENAFN- Daily Forex)
  • Spot natural gas prices (CFDS ON NATURAL GAS) fell during their early trading on Wednesday, to deepen their losses yesterday.
  • It recorded daily losses until the moment of writing this report, by -1.71%, to settle at a price of $3.212 per million British thermal units, after declining during trading.
  • Yesterday, it increased by -5.06%, erasing the gains that we witnessed at the beginning of the week.

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Natural gas prices fell yesterday despite falling production and weather forecasts pointing to increased consumption, as the February Nymex gas futures contract settled at $3.258 per million British thermal units, down by 18.9 cents per day. The March contract declined by about 16.5 cents to $3,057.

Spot Gas National Gas, by contrast, rose 36.5 cents to $5,725, as new cold spots formed and threatened to boost heating demand.

Forecasts Tuesday from the Maxar Weather Bureau showed lower-than-normal temperatures in the United States covering much of the southern 48 states in periods ranging from six to 10 days and 11 to 15 days.

In general, forecasts showed that the domestic demand in the United States for heating will increase in late this month until early February, which ends the mild weather that has dominated most of January so far.

Meanwhile, production on Tuesday also dropped to nearly 98 billion cubic feet per day, partly reflecting maintenance work in the Permian Basin. However, demand proved weak in the near term, especially compared to a snowy December, and negative sentiment affected the markets as it did for most of New Year's Day.Natural Gas Technical Analysis

Technically, the decline in natural gas comes amid the dominance of the bearish trend in the short term along a slope line, as shown in the attached chart for a period of time (daily). With the continuation of negative pressure for its trading below the simple moving average for the previous 50-day period.

The losses of the commodity came despite the positivity of the relative strength indicators, to drain the oversold that was clear in the past. This indicates the domination of the selling forces on the price movement.

Therefore, our expectations indicate a further decline for natural gas during its upcoming trading, to target the first support levels at 3.098, as long as the 3.618 resistance remains intact.

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