Natural gas prices are showing signs of consolidation after a sharp rally in May. Egypt is increasing its natural gas imports ahead of the summer season to meet energy demands. The US Dollar Index has rebounded after initial weekly losses.
The price of natural gas is currently trading around $2.70 per MMBtu in European trading sessions. Market participants are beginning to unwind their overextended long positions in natural gas due to European gas storage reserves reaching above 70% for the first time since last winter.
The US Dollar Index, which tracks the value of the Greenback against six major currencies, has seen two consecutive days of gains following a decline on Monday. Despite the recent gains, the index is still trading in the red for the week.
European natural gas storage reserves are back above 70%, leading to a decrease in demand for LNG imports in June. Egypt is set to import 20 additional LNG cargoes this summer to meet the increasing energy demand. Global LNG imports are expected to fall by 3% this month compared to May.
Natural Gas is currently trading in a consolidation phase between $2.60 and $2.82 after a volatile ride in May. Profit-taking and reassessments are expected to lead to additional retracement before investors start buying again. Key resistance levels to watch out for include $3.07 and $3.16, while support levels are near $2.53 and $2.14.
Supply and demand dynamics, global economic growth, weather conditions, competition from other energy sources, geopolitical events, and government policies all influence natural gas prices. Economic data releases, particularly the weekly inventory bulletin from the Energy Information Administration (EIA), impact natural gas prices. The US Dollar value also plays a significant role in natural gas pricing as most commodities are traded in USD.
In conclusion, the current consolidation phase in natural gas prices, increased imports by Egypt, and the impact of the US Dollar Index on commodity pricing are key factors to watch in the natural gas market. Market participants are closely monitoring supply and demand dynamics, economic data releases, and geopolitical events for further price movements.
