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Natural Gas Daily Price Analysis – European Benchmark Rises as NG Prices Surge on Asian Demand

  • 3 mins read ●
  • Published:
natural gas market analysis 2

Today’s market recovery is fueled by higher demand from Asia, especially in Japan and South Korea, where hot weather has increased the demand for liquefied natural gas (LNG).

Key Points

  • Natural gas prices dropped by -1.96% on June 25, 2024, opening at $2.816 and closing at $2.756 due to increased battery arbitrage by U.S. utilities.
  • Today, prices rebounded, opening at $2.850 and trading at $2.828, a +2.61% change, driven by stabilized global weather and increased production.
  • The U.S. New Home Sales report, a key economic indicator, is expected to influence natural gas prices by potentially increasing future energy demand.

Natural Gas Daily Price Analysis – 26/06/2024

Natural Gas experienced a big drop in price on June 25, 2024 due to which the open was at $2.816 and should have closed around $2.756 change of -1.96%. This decline was driven by increasing U.S. electric utility battery bids for arbitrage competitive rating. In fact, the U.S. Energy Information Administration (EIA) said that utilities are using batteries as a way to absorb cheap power generation and then sell it when prices spike with rising demand for electricity. The EIA sees capacity increasing about three-fold by 2028, meaning this trend won’t be capped here.

As of today, natural gas prices have rebounded. At this point in time, the prices opened today’s trading at $2.850 and are currently trading at $2.828, reflecting a +0.074 cents or +2.61% change. Decreasing distillation spreads have allowed for increased production, providing output support to product demands as the weather stabilizes globally.

A recovery in the market is fuelled by firmer demand from Asia, especially Japan and South Korea, where hot weather has boosted the region’s appetite for liquefied natural gas (LNG). The surge in Asian demand is rerouting cargoes away from Europe, tightening the market and removing downward pressure on prices.

The global natural gas continues to be waffled by different influences. The European benchmark TTF price rose by 1.4% to 35.35 euros per megawatt-hour. Similarly, it further reflects an increase of 25% since the start of April over tightening supplies and demand recovery in Asia.

Key Economic Data and News to Be Released Today

Today’s high-impact economic data includes the U.S. New Home Sales report, which is crucial for assessing economic health and potential future energy demand. Stronger-than-expected sales data could further boost natural gas prices due to anticipated higher consumption.

Visit our Economic Calendar

Natural Gas Technical Analysis – 26/06/2024

Natural gas is trending above the 200 EMA today, coupled with the fact that the RSI is close to the oversold level, we can expect the price to pullback to a significant support level before establishing a proper entry for a bullish run.

natural gas m15 chart
Natural Gas – 15-Minute Chart

On the other hand, it is important to monitor how price will react to the 200 EMA, should the price break below the EMA, we might have to change our bias towards a much more bearish outlook. However, the upcoming high impact data release will most likely give a clearer market direction for short-term traders.

Natural Gas Fibonacci Key Price Levels 26/06/2024

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

SupportResistance
2.7112.822
2.6772.856
2.6212.911

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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