Natural gas prices posted strong gains on Thursday, rising 0.77%, as some Southeast Asian countries are actively buying spot contracts to use gas in power generation.
As Reuters notes, China and other South Asian countries are planning to increase liquefied natural gas (LNG) imports amid prices falling to three-year lows. This increase in demand could lead to a rise in prices for this energy source.
Analysts at S&P Global Commodity Insights cite data on LNG deliveries to Asian countries for the first quarter of 2024. 161 cargoes of the fuel were purchased, almost 30% more than in the same period last year. The increase in imports was fuelled by an almost 50% drop in average prices, from $18.75 to $9.82 per million British thermal units.
Despite the recent increase in the cost of natural gas, prices remain under pressure from unusually warm temperatures in the Northern Hemisphere. Last winter was the warmest on record, particularly in the Atlantic basin. According to the US National Oceanic and Atmospheric Administration, average land temperatures from December to February were 2.65°C above the 20th century average.
Unusually warm weather elsewhere in North America also contributed to lower demand for natural gas and electricity.
On a technical level, natural gas prices are showing a broad correction on the H4 timeframe. In terms of wave analysis, the price is in the process of forming the third ascending wave. Breaking the top of the first wave at 2,005 will strengthen the upward movement of the price. Positive readings on the Bullish Power indicator (standard readings) support the bullish trend.
Signal:
Short-term prospects for natural gas suggest buying.
The target is at the level of 2.150.
Part of the profit should be taken near the level of 1.960.
A stop-loss could be placed at the level of 1.630.
The bullish trend is short-term, so trade volume should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
