Natural Gas Futures Analysis: Potential Steep Fall Ahead Amidst US-China Trade War
In the world of financial markets, the natural gas futures are showing signs of a potential steep fall in the coming week. The ongoing trade war between the United States and China has put American gas exporters in a tough spot, with the prospect of losing their edge in the global LNG market.
China recently imposed a 15% tariff on US liquefied natural gas in response to the Trump administration’s announcement of a 10% tariff on Chinese exports. This move is likely to push US fuel buyers to redirect their supply to Europe, where gas prices are currently stronger.
Furthermore, this week’s inventory report showed a lesser withdrawal compared to the previous week, indicating bearish pressure on natural gas prices. Mild weather forecasts for the second week of February could also keep the bears in control, along with the possibility of declining gas usage in Europe due to coal-switching.
From a technical perspective, natural gas futures are trading below the 50-day moving average and could experience a steeper slide if they break below the 100-day moving average. The futures are currently trying to hold support at the 9-day moving average, but a breakdown below this level could lead to a retest of the significant support at the 200-day moving average.
In conclusion, there is a possibility that natural gas futures could slide down to $2.2 by February 14, 2025, if they break below the important support level. Traders are advised to proceed with caution and consider the risks involved in trading natural gas futures based on this analysis.