Gas prices decreased by 1.6% over the day. This was due to a reduction in the consumption of liquefied natural gas (LNG) in Europe amid a growing share of renewable energy. In 2024, the share of solar and wind energy in Europe reached 20.5%, bringing gas consumption down to 22%. This factor creates difficulties for U.S. exporters, whose LNG shipments to Europe fell by 22%, while exports to Asia grew by 40%.
Another important factor of pressure on prices was the oversupply of gas in U.S. storage after a mild winter. Gas reserves are 12% above the average level, restraining price growth.
Temperatures are forecast to remain above normal from September 10 through September 19, according to weather services in the States. This may put pressure on demand. LSEG forecasts point to a further drop in gas demand to 101.3 billion cubic feet per day next week.
The oversupply of gas in the United States and lower demand in Europe create conditions for moderate price fluctuations. However, a possible strengthening of demand in Asia and weather anomalies may change the market balance.
The U.S. National Hurricane Center (NHC) reports a 30% chance that a tropical system in the Caribbean Sea could become a cyclone in the Atlantic basin. This phenomenon could move into the southern Gulf of Mexico over the next week.
The development of this storm could have a significant bullish impact on the natural gas market, as the Gulf of Mexico is a key natural gas and oil producing region in the Northern Hemisphere.
On the technical level, natural gas quotes are showing the formation of a broad correction, after exiting the downtrend on the H4 timeframe.
From the point of view of wave analysis, the price is forming the third ascending wave. Breaking through the top of the first wave at 2,295 will strengthen the upward trend.
Signal:
The short-term outlook for Natural gas is to buy.
The target is at the level of 2.400.
Part of the profit should be fixed near the level of 2.295.
The Stop-loss could be placed at the level of 1.970.
The bullish 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.
