Natural gas price is moving towards support

25 September 2023 178
Natural gas price is moving towards support

Natural gas is trading in a wide range. Since the beginning of last week, prices began to decline as a liquefied natural gas (LNG) plant in Australia has resumed full production.

 

Chevron, a US energy company, is working with the union to finalize the drafting of the agreement of changing labor conditions at the plants.

 

According to CNN, a work stoppage at Chevron’s Australian plants Wheatstone and Gorgon would have involved around 500 workers. Workers wanted better pay and working conditions.

 

Australia’s Fair Work Commission, which mediated the negotiations, helped broker a deal between Chevron and employees of the LNG facilities. The commission presented a series of recommendations that will serve as a template for a deal between Chevron and the union.

 

As the union members stated, they secured improved working conditions, pay rises and improved prospects for career advancement. Now it falls to the two sides to draft an agreement getting all of those recommendations in writing.

 

According to Daniel Toleman, principal analyst global LNG at Wood Mackenzie, the news of the conflict's resolution is expected to lower the gas price and remove the volatility from the market.

 

Meanwhile, the Minister of State for Energy Affairs Saad Sherida al-Kaabi reported successful sales of LNG from the North Field. There’s a high chance that the entire volume of gas from this major project could be sold by the end of this year.

 

According to the media holding S&P Global, Qatar is holding talks with several Japanese companies to sign LNG supply contracts. Japanese companies are also seeking to participate in Qatar's North Field expansion project.

 

S&P Global forecasts that from December 2023, global demand for gas will grow by 45% by the end of the decade.

 

The natural gas price continues to form a corrective upward channel on the H4 timeframe. The price has been declining since last week after reaching the trend resistance. This pullback indicates the tendency of the price to move towards the channel support.

 

Signal:

The short-term outlook for natural gas is to sell

The target is at the level of 2,560.

Part of the profit should be fixed near the level of 2,780.

A Stop-loss should be placed at the level of 3,080.

 

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.

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