Natural Gas kicks back above $2.15 in bullish reversal

• Natural Gas price are rallying on the back of surging demand in the Middle East.
• Several African and Middle Eastern countries use Gas to power air conditioning. 
• The US Dollar Index slips further, barely holding above 105.00. 

Natural Gas (XNG/USD) prices are heading higher for a second consecutive day driven by a pickup in demand from the Middle East and some North African countries. The best example is Egypt, where Gas exports have already decreased to meet local demand. The need for Gas is growing because of the usage of Liquified Natural Gas (LNG) to power air conditioning units amid an ongoing heatwave w in the region. 

Meanwhile, the US Dollar Index (DXY) is hanging by a thread after yet another possible intervention to propel the Japanese Yen (JPY). The JPY has appreciated more than 3% since last Friday against the Greenback, and that is reverberating in the US Dollar Index. Looking at the economic calendar, the US Employment Report is due later on Friday. 

Natural Gas is trading at $2.16 per MMBtu at the time of writing.  

Natural Gas news and market movers: Qatar ramps up production

• The biggest winner from Europe’s shift away from Russian Gas is Qatar. The kingdom is ramping up its production and expanding its mining of LNG to fulfill fresh demand. 
• Gazprom, the Russian biggest Gas company, reported a $7 billion loss after diminishing flows to Europe and with Asian demand not enough to fill the void, the Financial Times reports.
• The US is set to lose Gas inflows from Canada as the country is set to unveil its own LNG export terminal.
• The recent lower Gas prices were becoming an issue for ConocoPhillips, which missed earnings estimates in the first quarter of this year, Dow Jones reports. 

Natural Gas Technical Analysis: A brief spill over

Natural Gas has jumped back above $2.11, which remains a firm line in the sand. With plenty of false breaks in recent weeks around this level, the main question is whether the hot weather in the Middle East is substantial enough to push prices higher. As with these elements, rallies are likely to be very short-lived and Gas prices are soon to retreat below $2.11 again once the temperatures are mildening again. 

On the upside, the blue line at $2.11, the 2023 low, and the 100-day Simple Moving Average (SMA) at $2.10 are still to be considered, seeing the several false breakouts during the recent weeks. Further up, the next level to watch is the January 25 high at $2.33 before looking at the 200-day SMA at $2.54.

On the other side, the $2.00 handle has worked as nearby support for now. Further down, a trifecta of support is formed at $1.88, with the ascending and descending trend lines crossing and the 55-day SMA. Should that level break, expect a quick downward movement to the year-to-date low at $1.60.

Natural Gas: Daily Chart