NATGAS dipped from $3.82, a bearish wave driven by expectations of increased global demand for liquefied natural gas (LNG).
Anticipation of colder weather in the U.S. in mid-January nudged analysts to predict a surge in household usage, estimating an additional need of 18 billion cubic feet of gas as the weekend approached.
Gas Reserves Drop as Season Begins Early
Simultaneously, the Energy Information Administration (EIA) reported a substantial drop in gas reserves for the second consecutive week, signaling an earlier start to the season when gas stocks typically rise.
US LNG Exports Expand as Europe Seeks Alternatives
Investors are increasingly betting on LNG as the possibility of Europe continuing to receive gas supplies from Russia via Ukraine decreases.
This trend is further fueled by the incoming U.S. President, who has committed to granting more LNG export licenses, encouraging companies to prioritize lucrative overseas sales over domestic sales, given the abundant supply at home.
NATGAS Analysis – 24-December-2024
The commodity is in an uptrend, above the 75-period simple moving average. However, the bullish wave eased after the price rose to $3.82. As of this writing, NATGAS bounced off the 23.6% Fibonacci support level, trading at approximately $3.66.
The immediate resistance is at $3.7. From a technical perspective, the uptrend will likely resume if NATGAS prices climb above $3.7. In this scenario, the $3.8 high could be retested.
The Bearish Scenario
Please note that the bullish outlook should be invalidated if bears push the prices below the immediate support of $3.57. The next support level in this scenario will be the 38.2% Fibonacci retracement level at $3.45, backed by the ascending trendline.