Spot natural gas prices (CFDS ON NATURAL GAS) fell during their early trading on Tuesday, recording daily losses up to the moment of writing this report by -3.14%. It settled at $3.452 per million British thermal units, after declining during yesterday’s trading by -0.72. %.
After consecutive weekly declines at the start of the new year, natural gas futures rebounded on Tuesday amid expectations of new cold waves later this month. Nymex gas futures for February gained about 16.7 cents on the day and settled at $3.586 per million units. British thermal, and the March contract rose by 5.7 cents to $3.253.
The spot price was down about 27.6 cents on Friday, ahead of the long weekend in celebration of Martin Luther King Jr. Day, after several days of unusually warm weather to start 2023. The production also proved strong and settled at around 101 billion cubic feet per day. It remained near record levels of about 102 billion cubic feet per day.
However, natural gas prices are more than 50% lower than they were just a month ago, and for futures to maintain an upward trajectory, cold air must arrive soon and more February forecasts may need to be made.
The U.S. National Oceanic and Atmospheric Administration's eight- to 14-day forecast projects below-average temperatures across the western, midwestern, and southwestern portions of the lower 48 states.
Natural Gas Technical Analysis
- Technically, natural gas declined during its recent trading, to surpass the 3.618 support level.
- This happened amid the dominance of the bearish trend in the short term along a slope line, as shown in the attached chart for a (daily) period, with the continuation of negative pressure for its trading below the simple moving average for the previous 50-day period.
- The decline in the price came despite the start of positive signals in the relative strength indicators, after reaching oversold areas.
Therefore, our expectations indicate a further decline for natural gas during its upcoming trading, especially if it confirms its breach of the 3.618 support level, to target the first 3.098 support level.
Ready to trade Natural Gas Forex? We’ve made a list of the best commodity trading brokers worth trading with.