Natural gas forms a reversal

10 February 2023 347
Natural gas forms a reversal

A reversal pattern continues to appear in natural gas prices. The movement is in the form of an ellipse, based on which it can be assumed that the minimum levels have already been passed and in the near future, growth will accelerate.

Gas reserves in the U.S. decreased more than expected last week, creating preconditions for shortages in the future.

 

The news background supports natural gas quotations.

Currently, only a few companies in the U.S., which have invested billions of dollars in liquefaction plants, have the opportunity to export LNG. But the competition is gradually intensifying.

Energy Intelligence reports that U.S. producers are increasingly interested in LNG exports. The executive director of Devon Energy said that the company is considering entering international markets.

Demand for LNG is growing worldwide, especially in Europe. Despite the fact that climate plans of the EU prevent the signing of long-term contracts for imports, gas from the U.S. will continue to flow into Europe.

LNG exports will reduce the amount of gas inside the U.S., resulting in higher prices at home.

 

The global market of liquefied natural gas (LNG) will need several years to recover from last year's shocks, and high prices will encourage a demand for long-term deals, industry experts said at the India Energy Week conference.

According to Akshay Kumar Singh, CEO of Petronet LNG, industry players have realized the need for long-term contracts. For example, the Chinese company Sinopec signed a 27-year deal with QatarEnergy on the largest LNG sales and purchase agreement in history.

Companies continue to bet that high commodity prices will remain high in the near future.

 

According to technical analysis, the price of natural gas is forming a reversal. Now there is another attempt to form a new rising trend on the hourly timeframe. It is possible to open long positions with an upside target of $2.75. There are resistance levels. Stop-loss can be set at updating the current lows around $2.33.

 

Rise in the price for natural gas:

Take profit – 2.75

Stop-loss – 2.33

This content is for informational purposes only and is not intended to be investing advice.

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