- Natural Gas price swings back up and gains 3%.
- 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) swings back in the green with traders brushing off the Nonfarm Payrolls print. Traders are focusing back on the short term surge in demand by Egypt that is facing energy issues over the summer. By issuing a chunky tenor, markets see a squeeze in prices unfolding.
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 $2.93 per MMBtu at the time of writing.
Natural Gas news and market movers: Egypt back in focus
- 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: Swing higher
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD recovers to 1.0700 as US Dollar loses ground
EUR/USD recovers to test 1.0700 in the European session on Thursday. The renewed US Dollar selling in tandem with the USD/JPY retreat lends support to the pair. The pair's upside, however, appears capped amid EU political jitters. US data is next in focus.
USD/JPY holds pullback near 160.50, Japanese intervention risks loom
USD/JPY holds the pullback near 160.50 in European trading on Thursday, eroding a part of Wednesday's upsurge. The pair is dragged down by broad risk aversion and Japanese verbal intervention, supporting the Japanese Yen. The focus now is on potential FX intervention and US data.
Gold bounces off $2,300 after traders take profit
Gold bounces off the psychologically important $2,300 level after another leg of selling. The pair continues to be pressured by a higher-for-longer outlook on interest rates – data on Friday could be key.
Bitcoin extends losses after US government sends $240 million worth of BTC to Coinbase
The US Government transferred 3,940.28 BTC, valued at $241.22 million, to Coinbase Prime. The German Government transferred another 750 BTC, valued at $46.35 million, on Wednesday.
Indices fall back as inflation worries return
Higher inflation in Australia has not helped matters, and raises the uncomfortable prospect that major bugbear of the past two years is set to make an unwelcome return, leading to rate hikes once again.