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Natural Gas Technical Analysis: Price is Settling Higher – 28 April 2022

We expect more rise for natural gas during its upcoming trading, as long as it remains stable above 7.00.

Spot natural gas prices (CFDS ON NATURAL GAS) stabilized at an increase in its recent trading at the intraday levels, recording slight daily losses until the moment of writing this report by -0.76% to settle at the price of $7.198 per million British thermal units. 5.70%.

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Natural gas futures rose for the third day in a row on the back of escalating uncertainty over global supplies. This is especially after it was reported that Russia had halted natural gas supplies to Poland and Bulgaria, because they failed to respond to Russian President Vladimir Putin’s demand to pay for energy imports in Russian rubles, according to a report. European Commission President Ursula von der Leyen reportedly said the move amounted to “another Kremlin provocation”, claiming that Moscow was using gas to “blackmail” the region.

Although Russia’s halt to gas supplies to Poland and Bulgaria was not expected to have a significant impact on global balances, the possibility of further cuts to European countries was keeping the market on alert and fueling volatility.

Prices settled on Thursday as the market had already priced that escalatory step, amid the start of mass testing around Beijing and the partial closure of the coastal city of Qinhuangdao. This is amid measures taken to combat the outbreak of the emerging Corona virus in China, and a report indicating that major European energy companies are ready to comply with Russia’s request for payment in rubles.

Meanwhile, the expiration of the May contract in Nymex led to a sharp buying spree in the last half hour of Wednesday’s close.

The next round of inventories data from the US government is expected to focus traders’ concerns. The Energy Information Administration (EIA) is due to release its weekly storage report later Thursday. Expectations are for storage construction of about 40 billion cubic feet. This compares to a Bloomberg survey of 11 injections ranging from 20 billion cubic feet to 50 billion cubic feet. cube. Last year, the inventory report recorded an injection of 18 billion cubic feet in the same period, and the five-year average is 53 billion cubic feet.

Technically, the main bullish trend dominates the natural gas trading movement in the medium term and along a slope line, as shown in the attached chart for a period of time (daily). The positive pressure of its trading continuing above its simple moving average for the previous 50 days, in addition to that, we notice the start of the influx of positive signals. With the relative strength indicators, after they reached areas of severe oversold, and exaggeratedly compared to the price movement, to be what is known as the positive divergence in them, which increases the positive pressures on the upcoming trades.

Therefore, we expect more rise for natural gas during its upcoming trading, as long as it remains stable above 7.00, to target the pivotal resistance level 8.054.

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