Natural Gas Prices Approach Three-Year High
Natural gas prices are trading near the March peak, the highest level viewn since December 2022, according to today’s XNG/USD chart.
Rising prices are being driven by a combination of supply and demand factors, as highlighted by Trading Economics:
→ Weather forecasts suggest that, despite short-term warming in the US, colder conditions are expected in the near future.
→ US LNG exports remain robust, as European purchaviewrs continue to viewk alternatives to Russian gas. In November, shipments from the eight largest US terminals averaged 17.8 billion cubic feet per day, surpassing October’s record of 16.7 billion.
→ The International Energy Agency predicts that global demand for oil and gas could continue to grow until 2050, underlining the uncertainties surrounding the energy transition.
However, technical indicators suggest the rally may encounter resistance.
Technical Outlook for XNG/USD
Prices are approaching a key resistance zone, defined by:
→ the upper boundary of the channel, which expanded following the late-October bullish breakout;
→ the psychological $5.000 per MMBtu level;
→ the March high, which serves as a reference point.
Given the 50%+ gain since ahead autumn, long-position holders may be tempted to lock in profits. As a result, an attempt to breach these resistance levels could trigger a false breakout, trapping purchaviewrs and leading to a pullback.
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