Hot weather in the world will support natural gas prices in the summer

15 May 2023 234
Hot weather in the world will support natural gas prices in the summer

The price of natural gas has continued to trade in a sideways range since the beginning of this year. New negative factors pushing the price down are insignificant, and the old ones are already starting to lose their relevance. Positive fundamental drivers continue to emerge, which contributes to the reversal of gasoline prices.

Previously in the forecast, it was noted that there will be high temperatures in the coming months in Asia, Europe, and the United States. Now news that confirms these fears continues to emerge.

 

According to the North American Power Reliability Corporation (NERC), irregularities in power supply may occur in the United States this summer. Last year, the warnings about power outages were not as severe and did not include the southeastern United States. If the risks of extreme load on the power supply system are assessed high again, this may increase the demand for gas from utilities to ensure energy security.

 

Despite the fact that natural gas is an environmentally friendly fuel, many companies equate it to oil in terms of pollution risks. Initiatives to reduce oil production often involve gas as well, which has a positive effect on the price of fossil fuels.

BNP Paribas, the largest French lender, will not provide any financing for the exploration and use of new hydrocarbon fields. The bank representatives said this on Thursday, stating their target to reduce investments in oil exploration by 80% by 2030.

As noted in a statement from ShareAction, a responsible investment group, the bank's new commitments are positive and pointing to a downward trend in financing of the hydrocarbon segment by banks. However, representatives of the group noted that the bank still has a lot of space to work. According to them, BNP needs to eliminate gaps in indirect support of gas projects through loans for interested companies.

 

According to the technical analysis, natural gas came up from the downtrend on the hourly timeframe. The upward price impulse may continue until the first resistance around 2.46 dollars. Stop-loss can be set on a return to the downtrend and an renewal of the local low at $2.14.

 

Rise in the price for natural gas:

Take profit – 2.46

Stop-loss – 2.14

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

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