- Spot natural gas prices (CFDS ON NATURAL GAS) continued their decline in early trading on Thursday.
- It recorded new daily losses until the moment of writing this report, by -3.07% to settle at a price of $4.833 per million British thermal units.
- This happened after falling during trading on Friday and today, with a rate of -5.75%. Last week, natural gas fell sharply by -22.41%.
Natural gas has fallen sharply as domestic supplies in the United States hit a 7-month low. Concerns about weak supply in the broader market because of Russia's invasion of Ukraine and Moscow's curbs on gas flows to Europe appear to have faded for now, analysts said.
Mild weather forecasts that dampened demand expectations and a rapid rise in inventories were the main negative influences over the past week.
The Energy Information Administration said Thursday that US natural gas inventories rose by 111 billion cubic feet in the week ending October 14. Analysts polled by the Wall Street Journal expected an average of 102 billion cubic feet to be injected.
And a federal regulator said last week that the Freeport, Texas export liquefied natural gas terminal must receive full approvals before its planned restart in November. The Freeport terminal is one of the largest in the country, news reports said. The facility was closed due to a strong fire on June 8.
Traders received the news that it meant restarting the plant could be delayed further, with 2.5 (billion cubic feet) of gas per day still being sent to storage until approval is granted.
Natural Gas Technical Analysis
Natural gas continues its trend towards the south amid the dominance of the corrective bearish trend in the short term, and it was affected by breaking a major bullish slope line in the medium term earlier. This is shown in the attached chart for a (daily) period, with the negative pressure continuing for its trading below the simple moving average for a period the previous 50 days.
But in front of that, it is noticed that a positive crossover appears with the relative strength indicators, after it reached the oversold areas, which might curb the upcoming price losses, due to the need to dispose of some of this oversold.
Therefore, our expectations indicate that natural gas will continue to decline during its upcoming trading, if the 5.455 resistance remains, to target the 4.214 support level.
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