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Natural Gas Daily Price Analysis – Bullish Sentiment Remains Strong Despite Persistent Oversupply Issues

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natural gas market analysis 1

Concerns about oversupply persist despite production cutbacks, with storage levels significantly higher than average; upcoming weather forecasts until May 18 indicate potential impacts on demand.

Key Points

  • Natural Gas prices rose sharply last Friday, driven by reduced production and rising temperature forecasts.
  • The market displayed caution today, with prices dipping slightly amid high exports and decreased output from major producers.
  • Market volatility may increase today with anticipated speeches from Fed officials Barkin, Williams, and Bostic.

Natural Gas Daily Price Analysis – 06/05/2024

Natural Gas prices last Friday saw a noteworthy rise, closing at $2.142 after opening at $2.031, marking a positive change of +5.26%. The week concluded on a bullish note due to several factors, including a reduction in production activities and an uptick in temperature forecasts, which supported cash and futures markets alike. Notably, U.S. natural gas futures remained relatively stable, exhibiting minimal changes despite a brief rally, a sign of ongoing market consolidation.

Today’s trading session opened at $2.170, with the price slightly declining to $2.152, reflecting a change of -0.47%. This recent price action continues to reflect a cautious market sentiment. Contributing to this outlook is a three-month high in U.S. natural gas futures, currently at $2.1/MMBtu, driven by a mix of increased exports and a noticeable reduction in output as major producers like EQT and Chesapeake Energy have scaled back operations. This decline in production, by 9% this year, juxtaposes interestingly with rising gas flows to major LNG export facilities, notably following the reactivation of Freeport LNG’s plant.

All in all, the market is grappling with mixed signals; despite the production cutbacks boosting prices, there is an ongoing concern over an oversupply, as storage levels are significantly above the average by 34.9%. Looking forward, weather forecasts up to May 18 suggest normal to warmer conditions, which could affect demand patterns for natural gas.​

Key Economic Data and News to Be Released Today

Today, significant attention will be on speeches by Federal Reserve officials including Fed Barkin, Williams, and Bostic. Their commentary could influence market sentiment across various asset classes, including natural gas.

Investors and traders should also keep an eye on the economic calendar for upcoming reports that might impact the natural gas market. Potential influences include changes in storage data, any further updates on LNG exports, and shifts in weather forecasts that could alter demand expectations.

Visit our Economic Calendar

Natural Gas Technical Analysis – 06/05/2024

Today’s trading session for Natural Gas shows a bullish trend, with the price moving strongly above the 200 Exponential Moving Average, indicating a solid upward momentum. This is further supported by the RSI, which is currently signaling that the bullish movement may continue. The RSI, being in a supportive position, suggests that the market sentiment is leaning towards more buying activity.

natural gas 15m chart
Natural Gas 15M Chart – 06/05/2024

Given the strong position above the 200 EMA and supportive RSI readings, traders might consider entering a BUY position if the price breaks above today’s earlier high.

Natural Gas Fibonacci Key Price Levels – 06/05/2024

Short-term traders planning to invest in NG today should keep a close eye on the following key price levels for the day:


Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.

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