Natural gas is trading in a wide range. On Wednesday, its price in the United States rose by 4% to a one-week high. This happened against the backdrop of forecasts of growing commodity demand and a decrease in its daily production.
On the last day of trading on the New York Mercantile Exchange, the price of gas jumped by 10.8 cents (4.1%) and exceeded the mark of $2.760 per million British thermal units (MMBtu). This is the highest figure since September 19.
According to the London Financial Exchange (LSEG), average energy production in Continental United States fell to 102 billion cubic feet per day (Bcf/d). On a daily basis, gas production fell by 2.6 Bcf/d over the past two days to a possible five-month low of 99.4 Bcf/d.
As exports of liquefied natural gas (LNG) and pipeline gas are expected to increase, LSEG forecasts that US demand for the energy carrier will rise to 95.5 Bcf/d next week. In previous forecasts, experts have predicted smaller numbers.
Meanwhile, a Federal Reserve Bank of Dallas (FRB) survey conducted on September 27 showed that the majority of gas and oil well operators in the US expect drilling and well development costs to increase next year. It’s going to happen despite a decline in inflation relative to 2023 peaks.
According to experts, 60% of oil and gas executives expect well servicing costs to rise. At the same time 18% project costs to decrease, while 21% anticipate no change.
As for natural gas, half of respondents believe its price will trade between $2.50 and $3.49 per MMBtu at the end of 2023.
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 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 2,575.
Part of the profit should be fixed near the level of 2,790.
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.
