US natural gas prices in recent days have not had a pronounced trend, alternating between ups and downs. At the same time, the price approaching the level of $3 consistently causes a surge in demand for gas, pushing its price upwards. This scenario may happen again in the coming trading sessions, providing an opportunity to profit from long positions.
The latest forecast from the US Energy Information Administration (EIA) confirms a significant upside potential for gas prices. Average price expectations for 2024 have been raised from $2.17 to $2.19 per million British thermal units. As for 2025, the same figure increased from $2.9 to $2.95. The US started the current heating season with fuel stocks 6% higher than the 5-year average, but the surplus should be reduced significantly due to growing LNG exports.
According to Kpler, the volume of US LNG exports will reach 86.9 million tons in the current year. This is 0.8% higher than the level of 2023, with positive dynamics not hindered by a decline in demand in Europe by more than 20%. Unclaimed LNG shipments were redirected to Asia where consumption jumped by a third. Meanwhile, the situation in the EU market may change for the better.
German industry group BDEW reports that annual gas consumption in Germany will rise 3.3% in 2024 to 835 billion kilowatt-hours. At the same time, the country's fuel imports fell by 1%, forcing companies to use previously accumulated reserves. Germany has the largest underground gas storage facilities in the EU, but even these volumes will be exhausted if purchases are low. Increased demand will push gas prices higher.
The nearest target for gas prices to rebound could be the 3.3 level. In case of success, the chances of testing the November highs will increase.
Consider the following trading strategy:
Buy gas at the current price. Take profit – 3.3. Stop loss – 3.05.
This content is for informational purposes only and is not intended to be investing advice.
