The US EIA reported a 22 billion cubic feet increase in gas storage, surpassing expectations but potentially keeping prices under pressure due to high storage levels.
Key Points
- Natural gas prices dropped 1.71% last Friday due to global supply issues.
- Prices rebounded by 3.54% today, driven by resumed LNG operations.
- Weather forecasts, especially heatwaves, could impact demand and prices.
Natural Gas Daily Price Analysis – 29/07/2024
Last week, Friday was a red day for the US natural gas as the market plummeted a whopping 1.71% at $2.052/MMBtu. This dip was part of a broader trend of downward pressure on prices, influenced by global supply uncertainties. Notably, the outage at the Ichthys LNG plant in Darwin, Australia, and ongoing issues in Norwegian gas fields contributed to a tighter market. Additionally, increased demand for US LNG, spurred by Freeport LNG’s capacity ramp-up, has heightened competition for US gas, thus affecting domestic prices.
Today, natural gas prices have rebounded, currently trading at $2.077/MMBtu, a 3.54% increase from the opening price of $2.053/MMBtu. The market has reacted positively to the resumption of operations at major LNG export facilities, which are expected to alleviate some of the global supply concerns. The latest data from the US Energy Information Administration reported an addition of 22 billion cubic feet of gas into storage, surpassing market expectations and indicating robust supply levels. However, storage levels being 16.4% above the five-year average may continue to exert downward pressure on prices.
Key Economic Data and News to Be Released Today
While there are no high-impact news data today, weather forecasts and their implications for heating and cooling demand will be critical factors to monitor. As the summer progresses, unexpected heatwaves could drive increased cooling demand, supporting higher natural gas consumption and potentially boosting prices.
Natural Gas Technical Analysis – 29/07/2024
The recent price action shows a downtrend with lower highs and lower lows, particularly evident before the recent upward movement. However, the recent recovery above the 200 EMA and the sharp rise in the RSI suggest a potential shift in momentum, possibly towards a short-term bullish trend.
Given the current conditions, the market is likely to experience some consolidation or a minor pullback due to the RSI getting close to an overbought level. However, if the price sustains above the 200 EMA and further positive economic data or supply disruptions arise, we could see a continuation of the upward momentum.
Natural Gas Fibonacci Key Price Levels 29/07/2024
Short-term traders planning to invest in NG today should keep a close eye on the following key price levels for the day:
| Support | Resistance |
| 1.994 | 2.062 |
| 1.972 | 2.084 |
| 1.938 | 2.118 |
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.
