Natural Gas gives up Friday’s gains after upbeat NFP report limiting hopes for economic resurgence – Crypto News – Crypto News
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Natural Gas gives up Friday’s gains after upbeat NFP report limiting hopes for economic resurgence – Crypto News

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  • Natural Gas price trades below $2.90 and erases all Friday’s gains.
  • Egypt has issued a bigger than expected tender for more than 15 LNG cargoes. 
  • The US Dollar Index snaps losing streak and jumps higher, nearing 105.00.

Natural Gas price (XNG/USD) are falling out of bed in the US trading session after a big beat on expectations from the Nonfarm Payrolls report. Not only did the Nonfarm number come in above the highest estimation, all other components such as Average Hourly Earnings and Unemployment ticked up as well. This is the worst possible outcome for the US Federal Reserve, and dampens all hopes for any rate cut for 2024. 

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is jumping higher, away from the feared 104.00 level. Instead the DXY now is nearing 105.00 for this week and looks set to close out this Friday with a bang. The move is being enlarged a bit with US equities heading in the red as well, while some safe haven flow finds its way into the Greenback.  

Natural Gas is trading at $2.85 per MMBtu at the time of writing.  

Natural Gas news and market movers: Broader picture

  • With hopes for at least one rate cut out of the way, the US economic conditions remain contrained, which means sluggish demand ahead for commodities. 
  • Reuters reported on Friday that Egypt has released tender details for at least 15 LNG cargoes with deliveries to cover summer demand. 
  • Taiwan has signed a three-decade-long agreement with Qatar to buy LNG to fill the gap for its missing Nuclear and Coal energy, which is being phased out. 
  • Bloomberg reports that Gazprom CEO Alexey Miller and Turkey’s Energy Minister Alparslan Bayraktar have discussed further plans for an international Gas hub during a meeting in St. Petersburg.

Natural Gas Technical Analysis: Setback for now

Natural Gas trades higher again after a perfect technical bounce earlier this week against the 200-day Simple Moving Average (SMA) at $2.53. From here on out, the question is whether that bounce is strong enough to head to $3.08 on the upside. 

On the upside, the $3.00 marker as a big figure was tested in May and remains a first element to watch out for on the upside. The pivotal level near $3.07 ( March 6, 2023, high) remains key as prices failed to post a daily close above it. Further up, the fresh year-to-date high at $3.16 is the level to beat. 

On the downside, the 200-day Simple Moving Average (SMA) acts as the first support near $2.53. Should that support area fail to hold, the next target could be the pivotal level near $2.14, with interim support by the 55-day SMA near $2.25. Further down, the biggest support comes at $2.11 with the 100-day SMA. 

Natural Gas: Daily Chart

Natural Gas FAQs

Supply and demand dynamics are a key factor influencing Natural Gas prices, and are themselves influenced by global economic growth, industrial activity, population growth, production levels, and inventories. The weather impacts Natural Gas prices because more Gas is used during cold winters and hot summers for heating and cooling. Competition from other energy sources impacts prices as consumers may switch to cheaper sources. Geopolitical events are factors as exemplified by the war in Ukraine. Government policies relating to extraction, transportation, and environmental issues also impact prices.

The main economic release influencing Natural Gas prices is the weekly inventory bulletin from the Energy Information Administration (EIA), a US government agency that produces US gas market data. The EIA Gas bulletin usually comes out on Thursday at 14:30 GMT, a day after the EIA publishes its weekly Oil bulletin. Economic data from large consumers of Natural Gas can impact supply and demand, the largest of which include China, Germany and Japan. Natural Gas is primarily priced and traded in US Dollars, thus economic releases impacting the US Dollar are also factors.

The US Dollar is the world’s reserve currency and most commodities, including Natural Gas are priced and traded on international markets in US Dollars. As such, the value of the US Dollar is a factor in the price of Natural Gas, because if the Dollar strengthens it means less Dollars are required to buy the same volume of Gas (the price falls), and vice versa if USD strengthens.

 

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