Commodities Analysis & Opinion

Natural Gas: Tuesday Likely to Be a Turning Point


Since my Feb. 23 piece, natural gas futures have continued to maintain an uptrend amid supportive weather in favor of bulls, despite heavy selling pressure.

Reasons behind this reversal in natural gas futures and the lows of $2.114 might be delayed winters to regulatory approval for the Freeport terminal to start commercial operations, resulting in the formation of a bullish hammer in the monthly chart, which is likely to turn clearer if the prices close above $2.908 today.

The closure of the Freeport terminal was seen as a significant blow to European LNG supplies last year as countries sought to find replacements for Russian gas following the invasion of Ukraine.

However, it may take weeks before the Freeport terminal resumes a full-processing capacity of about 2.2bn ft./day. But a steep surge in hopes could boost bullish sentiments as this will resolve the overproduction issue.Natural Gas Futures Monthly Chart

Technically speaking, in the monthly chart, the formation of a bullish hammer could give a clear view of the body of this hammer turning red to green and close above $2.908 on the last day of Feb. 2023 – the same as was witnessed in Apr. 2021, before the advent of a rally that peaked at $6.284 in Sept. 2021.

Natural Gas Futures Weekly Chart

In the weekly chart, the prices maintain a bullish candle within this week’s first two trading sessions, still holding above the weekly gap-up, providing enough evidence of sustaining a bullish momentum despite selling pressure.

There is significant resistance at 9 DMA, which is at $2.863 in the weekly chart, but likely to be breached shortly as bulls could turn aggressive if the price holds above $2.767 in today’s trading session, as I mentioned in my last piece

Natural Gas Futures Daily Chart

In the daily chart, the last four consecutive bullish candles confirm a breakout before the inventory announcement this week amid increasing volatility, as 3 out of the past 4 EIA reports missed bullishly, and Freeport LNG is getting closer to being fully operational.


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