By Natural Gas Technical Analysis: Price Continues to Decline – 03 October 2022
Milder weather swept through much of the northern United States throughout the week easing demand, and the pressure on prices permeated when it hit Florida’s west coast on Wednesday.
Weekly cash prices for natural gas fell again as they did every week in September in the wake of Hurricane Ian’s demand destruction in the southeastern United States. Mild weather in most other areas of the lower 48 states also affected prices.
Milder weather swept through much of the northern United States throughout the week easing demand, and the pressure on prices permeated when it hit Florida’s west coast on Wednesday. The storm then swept through central Florida on Thursday before moving up the East Coast on Friday, bringing heavy rain with storm surges and strong winds that caused widespread power outages and reduced natural gas consumption.
Meanwhile, production last week was about 100 billion cubic feet per day in the United States, close to the record 101 billion cubic feet per day reached earlier in September, according to Bloomberg estimates.
Strong production played a big role in the latest US Energy Information Administration (EIA) storage report released on Thursday, which showed inventories rose by 103 billion cubic feet in the week ending September 23. The result matches the previous week’s print and the peak for this season.
Technically, the price is affected by a negative technical structure formed earlier in the short term, which is the head and shoulders pattern, as shown in the attached chart for a period (daily). All of this comes in light of its trading Along with an ascending trend line in the medium term, with the start of positive signals on the RSI indicators, after reaching oversold areas, which may curb the upcoming price losses.
Therefore, we expect more decline for natural gas during its upcoming trading, to target the important and nearby 6.338 support level.
