On Thursday, natural gas prices maintained an upward trend amid forecasts of colder weather in early January in the Northern Hemisphere. This reinforces expectations of higher demand for gas.
Gas supplies to the eight major US liquefied natural gas (LNG) export plants rose to 14.6 billion cubic feet per day in December, up from 13.6 billion cubic feet per day in November. These volumes are near the record high of 14.7 billion cubic feet per day set in December 2023.
Gas demand, including exports, is forecast at 132.6 billion cubic feet per day this week, up from 124.7 billion cubic feet per day last week. These data point to stable consumption growth, supported by winter and strong exports.
Natural gas prices are rising in Europe amid expectations of a reduction in supplies from Russia. At the end of this year, a key transit agreement on gas supplies through Ukraine expires. At the moment, none of the parties has expressed any intention to extend the existing contract.
The expiring transit agreement coincides with forecasts of colder weather in Europe. This could lead to rapid depletion of gas reserves. Traders find it difficult to secure sufficient fuel volumes for next year as they compete with Asian countries for offshore supplies.
At the technical level, natural gas quotes demonstrate an upward trend on the daily chart (D1). However, the price shows signs of correction on the H4 timeframe, forming a figure of uncertainty against the background of low liquidity in the pre-New Year period. The return of traders to the market by the end of the week may lead to an increase in volatility. MACD indicator (standard settings) remains in the positive zone, confirming the prevalence of bullish sentiment.
Signal:
The short-term outlook for Natural gas is to buy.
The target is at the level of 3.790.
Part of the profit should be taken near the level of 3.560.
A stop-loss could be placed at the level of 3.140.
The bullish trend is short-term, so a trading volume should not exceed 2% of your balance.
