Gas market strengthens downward momentum with 3.750 target

U.S. natural gas prices surpassed $4.5 per barrel this week, reaching their highest level since December 2022. The rise in prices was supported by record volumes of liquefied natural gas (LNG) exports amid a stronger demand outlook.

February was a historic month for U.S. LNG. Deliveries reached a record 15.6 billion cubic feet per day thanks to the capacity expansion at Venture Global's Plaquemine plant. However, despite robust exports, domestic demand remains volatile. Weather forecasters are predicting milder weather through March 18, which could reduce residential and commercial gas consumption.

The main pressure on energy prices is production growth. Daily U.S. production of the fuel reached 104.7 billion cubic feet in February, setting a new record.

The U.S. Energy Information Administration (EIA) expects average daily gas production to rise to 104.5 billion cubic feet in 2025. This is up from 103.3 billion cubic feet in 2024. Increased supply could offset high exports and limit further price increases.

Technical analysis shows that natural gas prices remain in an upward trend on the daily chart (D1). However, the H4 timeframe is displaying signs of waning bullish momentum. After approaching the trend resistance, the price bounced off of it.

At the same time, the volume of the Bulls Power Indicator (13) is approaching zero, emphasizing the downward trend. In addition, the RSI (14) has left the overbought zone. This may signal an imminent sell-off.

Signal:

Short-term prospects for Natural gas suggest selling. 

The target is at the level of 3.750.

Part of the profit should be taken near the level of 4.150.

A stop-loss could be placed at the level of 4.890.

The bearish trend is short-term, so trade volume should not exceed 2% of your balance.