Jump to content

Natural gas looks likely to recover despite early pullback


MongiIG

Recommended Posts

Natural gas looks likely to recover despite early pullback

Natural gas weakens in early trade, but we have seen tentative signs that price might have bottomed out after latest selloff.

bg_gas_hob_870778.JPGSource: Bloomberg
 Joshua Mahony | Senior Market Analyst, London | Publication date: Monday 29 November 2021

Natural gas drops at the open, yet resurgence could be in the offing

Natural gas prices have dropped back at the beginning of trade this week, with price failing to maintain the sharp gains seen on Friday.

Expectations of further lockdowns did bring upside for gas, while a report from the US IEA stated that they had seen a 1.7% reduction in production set against a 6.8% rise in demand. Broader energy markets have suffered on the premise that crude demand would fall if the Omicron variant led to further lockdowns.

However, natural gas could benefit from such a scenario, with people instead staying at home to drive up heating demand through winter. The question around winter demand is an important one, with European inventories already well below levels typically seen at this time of the year. Relations between Europe and Russia are important on that front, with the flow of gas from Russia key to keeping a lid on prices.

However, with Russian troops at the border with Ukraine, there is a risk that there is a breakdown in relations between the West and Russia leading to the use of natural gas as a negotiating tool. Thus, with winter demand potentially driving down inventories and Russian exports coming into question, there is a good chance we see another turn higher despite the current pullback.

Pullback could bring buying opportunity

Friday’s rise through the $5.45 swing-high brings an end to the trend of lower highs seen over the course of the past month. With the latest low coming in to place at the key $4.76 support level seen in late-September, this looks like a good place for the price of natural gas to have bottomed out.

As such, a bullish outlook is in play here, with a break below that key $4.76 support zone required to negate that bullish view.

NG-4-hours-2021_11_29-12h19.pngSource: ProRealTime
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      22,165
    • Total Posts
      93,081
    • Total Members
      42,571
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    shyamtastic
    Joined 10/06/23 20:44
  • Posts

    • Why isn't there a way to set options stop loss on IG platform?  Are you planning to implement this feature?
    • Hi,  I started trading Brent Crude Oil in IG platform but I could find a formula to correctly calculate the size I have to put while creating a position, based on the available amount I have. The quotation is based in points and it makes me wonder how operate. Any help is welcome.  Also, I plan to work with some leverage in the future, so any tip on this matter is also welcome.  Thanks.  
    • Greetings fellow traders, I am thrilled to share an exciting intraday trading idea for EURAUD that could potentially boost your profits. At Gold Signals by Professor, we have conducted a thorough technical analysis and confidently recommend a Buy position for traders like you. Our analysis indicates a significant development: EURAUD has managed to sustain itself above the crucial level of 1.60927. This breakthrough suggests a positive momentum, with potential targets at 1.61500 and 1.61800. To mitigate risks, we advise setting a stop loss around 1.60375. In order to maximize your trading success, it is vital to stay well-informed about the latest news and events that may impact the FX market. Factors such as global economic conditions, geopolitical tensions, and central bank policies can influence the price movements of EURAUD. Please note that the momentum of the trade can be influenced by unforeseen events or news. Therefore, we will be updating this level regularly in our channel to ensure you have access to the most recent trends and analysis of Gold and its trading potential. Wishing you all a prosperous day filled with successful trades!
×
×
  • Create New...