$3 mark has potential to turn gas prices upward

US natural gas prices have approached the round 3 level as part of the correction from the year's high of 3.63. Yesterday's drop below this level was quickly bought back, and against this backdrop, the bulls increased their activity today. The pullback in the price of gas has lasted for two weeks, and now is a good time for sellers to take profits. The closing of short positions can support the growth of gas prices to the level of 3.2.

According to analysts of Poten & Partners, the cost of gas in the US risks to return to the level of $6 per million British thermal units in 2022. Rising LNG exports and increased demand for electricity could eliminate the surplus in the US gas market in the coming years. Consumption of the fuel will grow by as much as 20% even if no new LNG permits are issued. And if the new administration eases regulations, the industry could accelerate significantly.

There is every chance that this effect will be felt by the end of December. Venture Global's new Plaquemines LNG facility is expected to begin its first shipments of liquefied fuel this month. The cargoes are likely to be destined for Europe, where the pricing environment is very favorable for LNG producers. As a result, December exports of liquefied natural gas from the United States could break the historical record.

Reuters experts expect the positive momentum in gas prices in all major markets to continue until at least the spring of 2025. Forecasts of lower temperatures will fuel the rise in heat demand in Asia, Europe and North America. These regions account for more than 2/3 of global gas consumption. Active replenishment of rapidly depleting fuel reserves in Europe and Asia should also stimulate strong gas demand, even if temperatures in these regions moderate again.

The Stochastic indicator supports the upward reversal in gas prices. Buyers can take 3.2 as the next target.

Consider the following trading strategy:

Buy gas at the current price. Take profit — 3.2. Stop loss — 3.