Spot natural gas prices (CFDS ON NATURAL GAS) declined slightly in early trading on Wednesday, to record slight daily losses until the moment of writing this report. It went down by -0.95%, to settle at $6.752 per million British thermal units, after declining during yesterday's trading by ;-0.50%.
[CAD:EN - 2 - Oil- popular commodity]
US natural gas futures rose nearly 1% near a one-week high on Tuesday, on expectations of cooler weather through mid-December than previously expected.
However, this price increase was limited by forecasts of lower gas demand over the next two weeks than previously expected.
In addition to cold weather which will boost the amount of gas burned to heat homes and businesses, energy traders noted that gas demand will also pick up in December if the Freeport Liquefied Natural Gas (LNG) plant in Texas returns to service, as expected.
The plant was shut down on June 8 due to an explosion caused by inadequate operating and testing procedures and human error. This is according to a report from consultants hired by the company to review the incident and suggest corrective actions.
Meanwhile, data from pipeline operators showed that gas flows to eastern Europe declined on Wednesday morning on the Yamal-Europe pipeline heading to Poland from Germany. Meanwhile, Russian flows through Ukraine to Europe were flat.
Data from the Ukrainian Transport System showed that nominations or requests for Russian gas to Slovakia from Ukraine via the Velke Kapusany border point amounted to 38.6 million cubic meters, up from 37.6 million cubic meters the previous day.
Russia's Gazprom said it would ship 42.4 million cubic meters of natural gas to Europe via Ukraine on Wednesday, a level similar to recent days.
Natural Gas Technical Analysis
Technically, the price is trying, in its recent trades, to search for an upward bottom from which to base it that may help it gain the necessary positive momentum to restore its recovery. At the same time, it is trying to drain some of its clear overbought with RSI indicators, especially with the negative signals coming from them, in light of the dominance of the main bullish trend In the medium term. Its trading is along a slope line, with continued positive support for its trading above its simple moving average for the previous 50-day period.
Therefore, our expectations suggest that natural gas will rise during its upcoming trading, as long as the 6.412 ;support remains stable, targeting the 7.788 resistance level.
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Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.