Natural Gas Futures Surge Amid Cold Weather Expectations and Political Developments
Natural gas futures kicked off the week with a gap-down, but quickly rebounded as bullish momentum took over. The 9 DMA crossed above the 20 DMA, signaling a bullish trend ahead of anticipated cold weather on New Year’s Eve. However, recent developments have introduced new uncertainties into the market.
A long-awaited study on the economic and environmental impacts of liquefied natural gas exports highlighted the need for caution in issuing new permits. Additionally, President-elect Donald Trump’s promise to end the moratorium on new LNG export permits could have significant implications for the market.
Furthermore, the United States imposed fresh sanctions on Russia-based entities involved in the Nord Stream 2 gas pipeline, adding to the market’s volatility. Weather forecasts also suggest milder temperatures in Europe, potentially easing inventory withdrawals.
As competition for LNG from Asia increases and Russian flows potentially extend, natural gas futures are expected to remain volatile in the coming week. Technical analysis shows that the futures are currently at a crucial point, with resistance at $3.556 and support at $3.494. A bearish inventory announcement could trigger a sell-off if the 9 DMA and 20 DMA are not defended.
In conclusion, investors should proceed with caution and monitor the market closely as political developments and weather patterns continue to impact natural gas prices. Stay tuned for more updates on this evolving situation.