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The Price is Trying to Drai


Natural gas futures rose on Monday, recovering from a 7% drop in the previous week, as forecasts for cold weather late this month and early next stoked

Spot natural gas prices (CFDS ON NATURAL GAS) advanced during their early trading on Tuesday, to consolidate their gains yesterday. It achieved new daily gains until the moment of writing this report, by 0.80%, to settle at a price of $3.470 per million British thermal units, after rising by 5.84% during yesterday’s trading.

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Natural gas futures rose on Monday, recovering from a 7% drop in the previous week, as forecasts for cold weather late this month and early next stoked. It was reported on Monday that a major export facility was one step closer to reopening after a fire last year added momentum.

Nymex gas futures for February were up 27.3 cents per day and closed at $3.447 per MMBtu, and the March contract was up 18.6 cents to $3.222.

Production in the US remained strong and near record levels at around 101 Bcfd, however, while the mild weather that affected markets last week was expected to continue for a few more days the cold reversal looms.

Elsewhere, UK natural gas futures traded around 150p per million British thermal units, near their lowest level since June of 2022. Inventories are holding more than 78% full despite heating demand surging with a fall in temperatures.

The UK benchmark is down more than 80% from its March peak of 800p, as ample supplies of natural gas inventories and strong imports from US LNG shipments eased supply concerns.

Natural Gas Technical Analysis

Technically, the price is trying in its recent trades to compensate part of what it incurred from previous losses. At the same time, it is trying to drain some of its clear selling saturation with the relative strength indicators, especially with the influx of positive signals from them. All of this comes considering the dominance of the bearish trend in the short term along a slope line, as well It is shown in the attached chart for a period (daily), with continued negative pressure for its trading below the simple moving average for the previous 50-day period.

Therefore, we still expect natural gas to return to decline during its upcoming trading, especially as long as it stabilizes below the  3.618 resistance level, to target the 3.098 support level.

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