Natural Gas rallies as Europe discusses keeping Russian flows via Ukraine

• Natural Gas price shows no signs of fatigue and resides near the high of 2024.
• Brussels is discussing keeping Gas flows from Russia open for next year.
• The US Dollar Index resides near 105.00 ahead of Wednesday’s CPI and Fed meeting.

Natural Gas price (XNG/USD) trades higher on Tuesday, nearing a fresh yearly high, as Europe discusses ways of keeping flows via Ukraine alive next year and amid increasing supply from Norway. . While Norwegian flows are at their highest levels since April, Europe is looking to talk to Ukraine and Russia to keep the Gas flowing. This opens up a sore wound for Europe after it pledged to ban Russian gas. With big uncertainties now over whether Europe can even become independent from Russian Gas, prices are rallying as traders foresee that Europe will need to buy more Gas if Russia or Ukraine refuse to strike a deal. 

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is lingering above 105.00 in a very calm start of the week. The DXY was moving a bit on Monday on the back of the outcome from the European elections, though the move has eased now. It looks like traders will await the main events on Wednesday, with the Consumer Price Index (CPI) release and the US Federal Reserve’s (Fed) rate decision and dot plot. 

Natural Gas is trading at $3.07 per MMBtu at the time of writing.  

Natural Gas news and market movers: Australia a fly in the ointment

• Bloomberg reports that Chevron has halted all gas production at its Wheatstone offshore facility in Australia to complete repairs to the fuel system. Production was already suspended on Monday. 
• Ukraine’s state-run Gas company Naftogaz says it sees substantial interest from Europe to tap its Gas reserves and facilities, Reuters reports. 
• Europe is considering bypassing Ukraine should Kyiv not want to cooperate with a European-Russian Gas deal. One option under consideration is to divert gas flows from Ukraine to Azerbaijan into Europe, Bloomberg reports. 

Natural Gas Technical Analysis: Third time’s the charm?

Natural Gas trades higher, printing a fifth green daily candle in a row. Though more upside might be granted, the current level is a heavy cap which will not be easy to overcome. Should this $3.07-$3.10 barrier snap, a quick run up to $3.50 could be in the cards. 

The pivotal level near $3.07 (high from March 6, 2023) remains key as prices failed to post a daily close above it. Add the red descending trend line coming in at $3.12, which would slam down any attempts to jump higher. Further up, the fresh year-to-date high at $3.16 is the level to beat. 

On the downside, the 200-day Simple Moving Average (SMA) acts as the first support near $2.53. Should that support area fail to hold, the next target could be the pivotal level near $2.14, with interim support by the 55-day SMA near $2.34. Further down, the biggest support comes at $2.11 with the 100-day SMA. 

Natural Gas: Daily Chart