The price of natural gas fell after U.S. forecasts of declining demand over the next two weeks amid cooler weather. The amount of gas flowing into U.S. LNG export plants declined due to maintenance outages.
The price decline came despite a drop in gas output in recent weeks. On Tuesday evening, the Texas power grid operator urged homes and businesses to conserve electricity. This will help them to reduce fuel consumption.
Europe is also willing to influence fuel pricing. For example, this September the German energy regulator will hold large-scale emergency drills with gas companies. It will be the test for their readiness for the reduced gas supplies.
Although Europe's largest economy managed to avoid the energy crisis last winter, it has not yet lifted the emergency imposed last June. Gas price spikes this month increase the risks of new reductions in the supply.
Germany's economy minister issued a warning last week. He claimed that the country may be forced to suspend or even shut down some of the plants. The reason is the restrictions on Russian exports.
German gas storage operators said storage sites could be completely depleted by January 2024, even if weak demand continues.
Various industry institutions, network operators, gas suppliers and large industrial customers will take part in the day’s teaching.
The emergency teaching can be seen by the market as an indicator of the growing risk of supply shortfalls. This indicates a long-term outlook for the gas price. However, short-term fundamentals open up scope for a corrective decline.
The natural gas price is forming an uptrend on the H4 timeframe. The price pullback from the trending resistance indicates a price movement toward upward support.
Signal:
The short-term outlook for gas is to sell.
The target is at the level of 2.250.
Part of the profit should be fixed near the level of 2.460.
A Stop-loss should be placed at the level of 2.830.
The bearish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
This content is for informational purposes only and is not intended to be investing advice.
