Natural Gas (NG) Price Forecast: Struggles at $1.853 Amid Norwegian Supply Surge

Natural Gas (NG) failed to extend its upward rally and turned bearish around the $1.853 level. The reason for its latest declining streak can be attributed to increased exports from Norway, potentially oversupplying the market and putting downward pressure on prices.

Furthermore, the renewed strength of the US dollar was seen as another key factor that kept the natural gas (NG) price lower. Despite a mild recovery in the US dollar, the dollar remained below the 104.00 level.

Norwegian Gas Resumes Flow to Europe

Norway has resumed gas exports to the UK and Europe after resolving previous issues. However, as temperatures rise and the need for gas for heating decreases, demand has dropped. Fortunately, Europe has substantial gas reserves in storage.

Furthermore, Norway’s efforts to increase production capacity may help stabilize supplies and could even lead to a reduction in gas prices.

Therefore, the resumption of Norwegian gas exports, coupled with decreased heating demand and ample European storage reserves, will stabilize natural gas supplies and potentially lower prices.

Geopolitical Factors Drive Uncertainty in European Natural Gas Markets

On the other hand, Ukraine’s Energy Minister has declared that they will not renew their contracts for Russian gas, signalling a reduction in Russian gas flow to Europe. This could pose challenges in meeting Europe’s gas needs, particularly if storage levels remain high.

Therefore, the decrease in Russian gas supply may drive up gas prices in Europe due to potential shortages. Moreover, escalating tensions between Ukraine and Russia add to the uncertainty, potentially causing significant fluctuations in gas prices in the near term.

Rising Asian Demand Adds Pressure to Global Natural Gas Prices

Moreover, the escalating coal prices in Asia are driving a surge in demand for gas for electricity generation. This heightened global demand could potentially lead to higher gas prices, particularly if Europe depletes its stored reserves during colder weather.

The fluctuating preferences for gas in different regions may result in significant price volatility in the coming months. If demand continues to rise, prices are likely to follow suit. However, any changes in supply or demand dynamics could prompt price reductions.

Natural Gas Price Forecast: Technical Outlook

Natural Gas has edged slightly upward to $1.856, a 0.16% increment in recent trading. The four-hour chart indicates a pivot point at $1.9065, suggesting a fragile balance between bears and bulls.

Immediate resistance for the commodity is stationed at $2.0297, with further barricades at $2.0852 and $2.1238. These levels will likely challenge bullish advances in the short term.

On the downside, support is rooted at $1.9399, below which lies $1.8962 and $1.8373, safeguarding against a deeper retreat.

The Relative Strength Index (RSI) currently at 34.88 points towards a market that may be oversold, whereas the 50-day Exponential Moving Average (EMA) at $1.9065 traditionally supports a buying trend, now aligns with the pivot, underscoring the current hesitation in price direction.

In conclusion, the technicals reflect a neutral stance, with the market deciding its bias at the pivot point.