The price of natural gas in the U.S. continues its decline despite remaining oversold. The main reason for the decline is a warmer than expected winter in Europe.
The U.S. Energy Information Administration (EIA) has published a report on the energy outlook. In the report, it is predicted that 2023 will be stronger than 2022 for the U.S. gas industry According to the operator of the Freeport plant, LNG supplies will resume in the second half of January, and by March the operating capacity will be comparable to production levels before the accident.
In addition, in order to meet the high demand for gas in Europe and Asia, facilities in the U.S. will continue operating at the top of their capabilities. The EIA expects that LNG exports from the U.S., the most of which come from Texas, will beat new records by March 2023.
LNG supplies will increase only in the second half of January, and until that time, the price of gas may continue its powerful downward trend. When LNG supplies increase, there will be an internal reduction in natural gas in the U.S., then the price may rise back.
Norway plans to export about 122 billion cubic meters of natural gas in 2023 at the level of last year and to maintain this volume for the next four or five years.
on Thursday, Norwegian Oil and Energy Minister Terje Aaslands said that Norwegian authorities have updated the estimate of gas sales from the Norwegian continental shelf in 2023 and that the estimate is 122 billion cubic meters, which corresponds to the level of 2022.
Norway will continue to produce and export gas in record volume, which is negative for gas prices.
According to technical analysis, the price of natural gas is in a downward trend for several weeks. Now the price has reached the upper limit of the trend and traders are trying to break through this level. Following the trend, the most likely scenario is a rebound from this level and a continuation of the decline.
The target is to take the support level of 3.65. On the hourly timeframe, it twice acted as a price rebound point. The target below is not considered, since on the base of high oversold, the price may begin to form a sideways trend followed by an upward exit.
The stop-loss can be set above the downtrend at the round level of 4.00.
Natural gas price reduction:
Take profit – 3.65
Stop-loss – 4.00