Natural gas prices, following the seasonal trend, started to decline as spring approached. Thus, they have dropped from 4.034 to 3.220 since January 23. On Tuesday, the opening price was 3.222. However, despite the current correction, overall expectations point to higher prices in 2025 and 2026.
The current price dynamics are also influenced by other factors. For example, the European Commission decided to postpone its planned publication date for a roadmap to phase out fuels from Russia until the end of March. This will potentially slow down price growth in the short term, as supply is not yet limited. Meanwhile, US President Donald Trump continues to call on the European Union to boost purchases of US gas, although some European leaders are concerned about excessive dependence on US LNG.
In addition, Italy plans to begin refilling its gas storages as early as February, which could have an impact on prices earlier than usual. Previously, the country only refilled storage facilities in the spring. The ongoing geopolitical tensions pose a risk that wholesale gas prices may be higher in summer than in winter, which may prompt other countries to refill storages earlier.
The US Federal Reserve interest rate decision is to arrive on Wednesday, followed by natural gas inventory data on Thursday. The current interest rate level is expected to remain unchanged, leaving gas prices without support. Meanwhile, a possible increase in natural gas inventories will weaken demand for gas.
From a technical point of view, the current analysis does not suggest a well-defined trend. The MACD hints at the start of a decline, while the RSI does not show a clear predominance of either bulls or bears in the market.
Current recommendation:
Sell at the current price. Take profit – 3.077. Stop loss – 3.430.
This content is for informational purposes only and is not intended to be investing advice.
