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    Natural Gas Technical Analysis: Price Attacking Resistance - 17 May 2022


    May 17, 2022 - info@dailyforex.com

     

      Spot natural gas prices (CFDS ON NATURAL GAS) rose in their recent trading at the intraday levels, to achieve daily gains until the moment of writing this report, by 0.92%, to settle at the price of 7.995 dollars per million British thermal units, after rising in trading yesterday by 4.88%.

      [CAD:EN - 2 - Trade long or short with any of our selected brokers]

      After last week's loss, natural gas futures rebounded again on Monday, as traders reflect on reports of strong energy consumption with lower production. The June Nymex contract gained 29.3 cents a day and settled at $7.956 per MMBtu, and the July contract gained 28.8 cents to $8.053.

      Production in the United States fell slightly below 95 billion cubic feet, to start on Monday, after briefly rising above that limit last week, according to Bloomberg estimates. Production remained well below a peak of 97 billion cubic feet last winter, amplifying already growing concerns about adequate storage supplies.

      The US Energy Information Administration (EIA) recently reported pumping 76 billion cubic feet of natural gas into storage for the week ending May 6. The reading fell from the five-year average storage of 82 billion cubic feet.

      Meanwhile, European demand for American liquefied natural gas (LNG) has stabilized at robust levels amid the ongoing Russian war in Ukraine. Countries across Europe are calling for LNG to gradually replace supplies of Russian natural gas.

      Rystad Energy also noted the threat posed by Russia to preemptively cut off pipeline gas exports to parts of Europe in response to Western sanctions and recent steps by Finland and Sweden to join the North Atlantic Treaty Organization, also known as NATO.

      Russian President Vladimir Putin, in an initial move, cut off Finland's electricity supply over the weekend. As European Union foreign ministers failed on Monday in their efforts to pressure Budapest to lift its veto against a proposed oil embargo on Russia, the ban would require the approval of all EU countries.

      Meanwhile, Shanghai on Tuesday achieved the long-awaited milestone of three straight days with no new COVID-19 cases outside quarantine zones and set out on Monday its clearest timetable yet for exiting the lockdown now in its seventh week.

      Technically, the price continues to rise amid the dominance of the main bullish trend in the medium term along a slope line, as shown in the attached chart for a (daily) period. This is the start of positive signals on the relative strength indicators, after they reached oversold areas, in addition to the continuation of the positive pressure in its trades. Above its simple moving average for the previous 50 days, the price attacked the current resistance level 8.054 with its recent rise.

      Therefore, we expect more rise for natural gas during its upcoming trading, especially in case it breaches the resistance 8.054, to target after that the pivotal resistance level 8.870.

      Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.

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