Natural Gas Technical Analysis: Price Under Downward Pressure – 08 March 2023
Spot natural gas prices (CFDS ON NATURAL GAS) settled down during its early trading on Wednesday, achieving slight daily gains until the moment of writing this report, by 1.02%. It settled at a price of $2.675 per million British thermal units, after rising slightly during yesterday’s trading. by 2.16%.
Natural gas futures were slightly higher on Tuesday, as some heating demand was boosted by the next 15-day outlook.There was also some technical support, as the April Nymex gas contract settled at $2.687 per million British thermal units, up 11.5 cents on the day. May futures advanced by 11.0 cents to $2.840, making up part of the price.Small from the over 14% loss seen on Monday.
In its monthly report, the US Energy Information Administration (EIA) lowered its forecast for natural gas prices in the United States for the year 2023 and said that it expects to witness the lowest domestic consumption of natural gas in the first quarter since 2018.
The Energy Information Administration also said that US natural gas prices are likely to average $3.02 per million British thermal units this year, down 11.2% from the February forecast.
Technically, the price of natural gas suffers from the continuation of the negative pressure of its trading below the simple moving average for the previous 50-day period. This is in addition to the start of negative signals in the relative strength indicators, after reaching areas that are highly saturated with purchases. All of this comes under the dominance of the main bearish trend in the medium and short term along A trend line, as shown in the attached (daily) time period chart.
Therefore, our negative expectations surrounding natural gas remain valid, especially as long as the price stabilizes below the 2.748 resistance, targeting the psychological support at $2.00.
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