FxNews—US natural gas prices have climbed past $2.3 per million British thermal units (MMBtu). This increase follows a sharp 14.2% fall last week. The rise is due to reduced gas production and the expectation of cooler weather soon, which may lead to higher heating usage.
Although weather experts predict that the weather will generally be warmer than usual until early November, the colder weather expected next week could push the need for heating. This will likely raise the average daily gas demand from 96.0 billion cubic feet (bcfd) to 100.2 bcfd.
Gas Production Drops in Lower 48 States
In the Lower 48 states, the average gas production has dropped slightly to 101.5 bcfd in October from 101.8 bcfd in September.
This decline marks a trend, and experts believe gas producers might reduce their production next year. This would be the first cutback since 2020, mainly because less drilling is happening.
US LNG Exports See Steady Growth in October
Meanwhile, the gas supply to the major US liquefied natural gas (LNG) export plants has grown. It averaged 13.1 bcfd this month, a slight increase from 12.7 bcfd in September.
However, these figures are still lower than the record high of 14.7 bcfd in December 2023. This indicates steady but cautious growth in the sector.
NATGAS Technical Analysis – 22-October-2024
As of this writing, NATGAS trades at approximately $2.29, testing the 23.6% Fibonacci retracement level as resistance in conjunction with the descending trendline. Furthermore, the Awesome Oscillator histogram is green near the signal line from below. The Relative Strength Index also flipped above the median line, recording 55 in the description.
This development in the technical indicators suggests the bull market is strengthening, and the price could rise further.
NATGAS Price Forecast – 22-October-2024
The immediate resistance rests at $2.23, the 23.6% Fibonacci retracement level. From a technical standpoint, the uptrend from September 24’s low at $2.18 could spread to the next Fibonacci level if the NATGAS price closes and stabilizes above the immediate resistance.
In this scenario, the next bullish target could be the $2.42 mark, followed by the 50% Fibonacci retracement level at $2.5.
Please note that the bullish scenario should be invalidated if NATGAS falls below the September 24 low at $2.18.
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
