Analyzing the movements since November 19, 2024, I see that natural gas futures have performed as I predicted, with natural gas prices continuing to remain in bullish mode after testing a low at $2,218 on October 10, 2024, well below the 200 moving average.
This undercurrent has continued to push natural gas futures higher amid growing hopes that U.S. production will continue to decline in 2024 as the COVID-19 pandemic has reduced demand .
There is no doubt that this equation is likely to reverse as the latest outlook from the US Energy Information Administration indicates that US natural gas producers will increase production in 2025 after a series of reductions. production this year, with growing demand from liquefied natural gas export plants likely to increase prices which have fallen to their lowest level in several years.
Most analysts expect increased demand for exports to push average annual gas prices in 2025 up more than 40% from levels seen in 2024.
This scenario indicates that fluctuations in natural gas futures could continue to influence prices over the next two months, since natural gas futures moved sharply on November 21 before experiencing a sharp decline after the Inventory data announcement Thursday.
Analyzing the movements of natural gas futures in the daily chart, I see that natural gas futures formed a double top before the advent of the decline against the background of expectations of an increase in production in 2025.
Undoubtedly, the formation of a bearish candle awaits the next confirmation candle. In this case, the current level seems evident enough to provide strong resistance to natural gas prices.
Second, a break in natural gas futures below significant support at $3.093 will confirm continued downside movement which could generate further selling for natural gas futures to test the next significant support at 200 DMA during the first week of December this year.
Finally, I conclude that natural gas futures could hold on the first support at the 9 DMA, which is at $3.4, which could result in an upward move from this level, as the second support is at the 20 DMA, which is at $2.835. This range can provide sufficient support for natural gas futures this week and only a break below this range could keep prices in bearish territory.
Warning : All readers are urged to take a position on natural gas at their own risk, as this analysis is purely based on observation. The author of this analysis does not hold any position in the natural gas market.
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