Natural Gas prices are on the rise due to increased demand from the Middle East and some North African countries, particularly for air conditioning units. Egypt, for example, has reduced Gas exports to meet local demand, resulting in higher prices. Furthermore, the US Dollar Index (DXY) is struggling as the Japanese Yen appreciates against the Greenback. The US Employment Report is set to be released later in the week, which could impact Gas prices.
Qatar is benefiting from Europe’s shift away from Russian Gas by increasing production to meet the growing demand. Gazprom, the largest Gas company in Russia, reported a $7 billion loss due to diminished flows to Europe. Additionally, the US is expected to lose Gas inflows from Canada as the country plans to unveil its own LNG export terminal. Lower Gas prices have impacted ConocoPhillips, which missed earnings estimates in the first quarter of the year.
From a technical analysis standpoint, Natural Gas has surpassed the $2.11 mark but faces resistance at the $2.33 level and the 200-day Simple Moving Average at $2.54. On the downside, the $2.00 handle serves as support, with further support at $1.88. Geopolitical events, government policies, and global economic growth all play a role in influencing Gas prices.
The weekly inventory bulletin from the Energy Information Administration (EIA) is a major economic release affecting Natural Gas prices. Economic data from large consumers such as China, Germany, and Japan can also impact supply and demand dynamics. Natural Gas is primarily priced in US Dollars, so fluctuations in the value of the Dollar can influence Gas prices. Overall, supply and demand dynamics, weather patterns, competition from other energy sources, and geopolitical events all contribute to the volatility of Natural Gas prices.
