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Natural Gas Price Prediction – Support At $8.00 Stays Strong

By:
Vladimir Zernov
Published: Aug 4, 2022, 16:17 UTC

Natural gas prices remain range-bound after the release of the EIA report.

Natural Gas

In this article:

Key Insights

  • Natural gas received support near $8.00 and bounced back after the release of the EIA report. 
  • Working gas in storage increased by 41 Bcf from the previous week. 
  • A move above $8.35 will push natural gas back to the $8.50 level. 

Natural Gas Price Attempts To Rebound After Touching Lows Near The $8.00 Level

Natural gas prices are trying to rebound after the release of the EIA Weekly Natural Gas Storage Report, which indicated that working gas in storage increased by 41 Bcf from the previous week. Analysts expected that working gas in storage would grow by 29 Bcf. At current levels, stocks are 337 Bcf below the five-year average for this time of the year.

The weather forecast remains favorable for strong natural gas demand. At the same time, problems at Freeport LNG continue to impact the domestic market, leading to a higher-than-expected build in stocks.

Meanwhile, the situation in Europe remains extremely tense, as Russia’s Gazprom has recently stated that delivery of the Nord Stream turbine is impossible due to sanctions. There is a serious risk of a full cut of supplies from Russia to Europe in case the situation escalates further.

There is no immediate impact on the U.S. domestic market. However, it is clear that once Freeport LNG is back online, every ounce of natural gas that can be exported to Europe or Asia will be exported due to the high spread between domestic U.S. prices and international LNG prices. In this light, the rally in Europe’s natural gas market provides psychological support to the U.S. natural gas market.

Natural Gas Stays In The $8.00 – $8.50 Range

natural gas august 4 2022

Natural gas received support near $8.00 and is currently trying to settle back above $8.35. In case this attempt is successful, it will move towards the next resistance, which is located near the recent highs at $8.50. This resistance level has been tested several times and proved its strength.

A move above $8.50 will push natural gas towards the resistance at $8.75. If natural gas climbs above this level, it will head towards the resistance at $9.00.

On the support side, natural gas needs to stay below $8.35 to have a chance to gain downside momentum in the near term. The next support level is located at $8.15. If natural gas declines below this level, it will head towards the next support level at $8.00.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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