Natural Gas Prices Forecast: News of Strikes, Cold Fronts Fuel Gains

Highlights

• Natural gas futures surge to highest levels since late January, influenced by an array of global events.
• Price volatility fueled by renewed strike plans in Australia, Middle East tensions, and cooling temperatures in key markets.
• Soaring oil prices amid Middle East conflicts contribute to the natural gas market’s fluctuating landscape.
• Sustainability of price rise is being questioned, attributed to market volatility. 

Natural Gas Futures Surge Amid Geopolitical Tensions and Cooler Forecast

Natural gas futures saw a significant uptick, hitting their highest levels since January 24. The market’s volatility is stoked by multiple factors: a sudden jump in crude oil prices due to Middle East tensions, renewed strike plans in Australia’s Chevron LNG facilities, and forecasts of cooler weather boosting demand in key areas. Last week’s lighter-than-expected storage report and weak production estimates also fanned the flames, pushing futures higher.

At 13:13 GMT, Natural Gas Futures are trading $3.378, up $0.042 or +1.26%.

International Factors Influence

Prices In Europe, Dutch and British wholesale gas prices climbed. The Dutch November contract advanced 3.37 euros to 41.60 euros per MWh, while the British day-ahead contract rose 11.50 pence, marking a seven-day high. Analysts attribute this rise to renewed strike actions at Chevron’s LNG facilities in Australia and geopolitical instability in the Middle East.

Strike Actions Resume Down Under

Australian unions accused Chevron of backtracking on a previously struck deal, triggering the resumption of strikes. Although the market’s initial response to the strike threat has been mixed, the notice of resumed strikes could tip the balance. Chevron must be given a seven-day notice before strikes can begin, which unions plan to issue shortly.

Near-Term Outlook: Bearish or Bullish?

Despite current volatility, market analysts from Engie EnergyScan believe the price surge is likely temporary and within the range of market volatility. The looming conflict in the Middle East has yet to significantly impact natural gas prices but serves as a wild card for future fluctuations. Goldman Sachs also indicated no immediate major impact on oil inventories due to Middle East tensions but cautioned against the longer-term implications.

Given the confluence of factors—strike actions, geopolitical tensions, and variable weather conditions—the market sentiment for natural gas remains cautiously bullish in the short term. However, it’s essential to keep an eye on evolving situations that could quickly swing the market.

Technical Analysis

Based on the provided daily chart data for Natural Gas, the current price of 3.350 is comfortably above both the 200-Day and 50-Day moving averages, standing at 2.679 and 2.725 respectively. This signifies bullish momentum.

The price also sits between the minor and main support and resistance levels, providing room for both upward and downward movements. However, it’s notably closer to minor resistance at 3.406 than to main support at 2.838, suggesting the possibility of a breakout.

Overall, the market sentiment appears bullish as traders ride the recent breakout of a downtrend line.