Natural gas prices rise moderately on Thursday amid escalating confrontation in the Middle East. Western countries urge Israel for restraint in response to a series of attacks from Iran. However, Israel emphasized its independence in making decisions about defending its country. The situation in the region makes investors more cautious in assessing risks and get out of short positions.
Earlier this week, the spot price in North Asia topped $11 per million British thermal units (mBtu), an increase of about 40% since the end of February.
This increase came amid a similar rise in Europe, which competes with Asia for liquefied natural gas (LNG) supplies. So far, there has been no direct impact on gas supplies from the Middle East to Europe, but an increase in the conflict could lead to disruptions. This will cause prices to rise even more, given the low level of diversification of European supplies. The role of the Middle East in the European energy market has increased significantly in the context of declining supplies from Russia.
In addition, prices have been affected by a reduction in gas flows to US LNG export facilities by a quarter over the past week, including due to maintenance. This could limit supplies to Asia. Japanese importers are also show increased interest in buying gas, driving up gas prices.
On the technical level, natural gas quotes are in the formation of a narrow correction on the H4 timeframe. The price bounced from the corridor support, moving towards the opposite boundary. Positive indicators of Bulls Power indicator (standard values) testify to the upward price trend.
Signal:
The short-term outlook for Natural gas is to buy.
The target is at the level of 1.940.
Part of the profit should be taken near the level of 1.825.
A stop-loss could be placed at the level of 1.530.
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.
