Natural gas prices (NG) have seen a recovery, rising 0.86% to reach $2.93. This rebound is significant as it coincides with the $2.62 support level, strengthened by a 50% Fibonacci retracement.
A hammer candlestick pattern has formed after a series of declining candles, suggesting potential bullish momentum. If prices break above the initial resistance at $2.71, further increases could target $2.83. The 50-day Exponential Moving Average (EMA) at $2.48 and the 200-day EMA at $2.42 provide additional support for this upward trend.
As long as prices stay above the pivot point at $2.68, the bullish outlook remains intact. However, a drop below this level could signal a downturn.
Natural Gas Prices Rise Amid Middle East Tensions
Natural gas prices have bounced back from earlier losses, reaching an intraday high of $2.93. This increase is fueled by geopolitical tensions in the Middle East and worries about possible supply disruptions. Additionally, a weaker US dollar is making natural gas more affordable for international buyers.
Despite this positive sentiment, stronger-than-expected US inflation data and uncertainty regarding Federal Reserve rate cuts could introduce volatility, limiting further gains.
US Natural Gas Futures Decline Due to Hurricane Milton
Despite the recent rise, US natural gas futures have dropped nearly 2%, hitting a two-week low. This decline is attributed to demand forecasts predicting a reduction in consumption due to Hurricane Milton.
The storm has caused power outages for millions in Florida, decreasing immediate demand for natural gas from power generators.
UK Natural Gas Prices Surge Due to Winter Demand and LNG Imports
In the UK, natural gas prices for the NBP month-ahead contract have risen to €39.32/MWh, surpassing the Dutch TTF contract at €38.59/MWh. This price premium reflects increasing winter demand and higher LNG imports.
UK gas consumption has surged compared to last year, supported by strong import capacity.
Short-Term Market Outlook: Bullish
The outlook for natural gas prices remains bullish, backed by the 50% Fibonacci level and a favorable technical setup. Geopolitical tensions in the Middle East and rising winter demand in Europe are contributing to upward pressure on prices.
If prices break above $2.71, they could rise further, targeting the resistance level at $2.83.
You Might Be Interested In
- What is Liquefied Natural Gas (LNG)?
- How Long Can Natural Gas Be Stored?
- What is the Symbol for Natural Gas Futures?