On Wednesday, natural gas prices declined nearly 6% at the end of trading, according to data from the London-based ICE exchange.
The previous day, gas prices in the region soared by almost 14% after the Finnish media spread information about the upcoming emergency press conference of the Finnish government on the situation with the leak at the Balticconnector pipeline.
At a press conference, Finland Prime Minister Petteri Orpo declined to comment on the reasons for the pipeline breakdown, urging not to jump to conclusions.
Earlier, the Finnish company Gasgrid Finland reported that a subsea gas pipeline between Finland and Estonia was shut on Sunday night due to an unusual drop in pressure in the pipe. This may indicate a leak. The Estonian energy company Elering did not exclude the possibility of deliberate damage to the Balticconnector pipeline.
According to scientific consortium NORSAR, last weekend, a seismic array in Finland picked up a signal at the time when the Balticconnector gas pipeline ruptured. The magnitude was low, about 1 on the Richter scale.
The pipeline was encased in concrete, and the casing was broken, or peeled off, specifically at that site of damage. Perhaps, someone tore it on the side, told Estonian Navy Cmdr. Juri Saska.
Balticconnector is a pipeline about 80 kilometers long on the bottom of the Gulf of Finland between Inkoo in Finland and Paldiski in Estonia.
Meanwhile, LNG demand in Asia and Europe is beginning to rise ahead of winter season. However, risks connected with weather conditions remain, because of possible supply disruptions and geopolitical instability in the market.
The threat of strikes at LNG export terminals in Australia may further complicate the situation on the global gas market.
Despite high levels of gas stocks and reduced gas consumption and imports, Europe’s biggest economy, Germany, faced gas shortages. The International Energy Agency (IEA) also expressed concerns about the risk of price volatility, especially in case of a cold winter.
Gas prices have gone beyond the broad correction on the D1 timeframe.
In terms of wave analysis, the price is forming of the third ascending wave on the H4 timeframe. The breakthrough of the top of the first wave at 3.070 has already taken place. The upward movement may intensify in the near term.
The short-term outlook for Natural gas is to buy.
The target is at the level of 4.200
Part of the profit should be fixed near the level of 3.750
A Stop loss should be placed at the level of 2.930
The bullish trend is of a short-term nature, so it is recommended to limit the trading volume to no more than 2% of your capital.