Natural Gas falls despite increasing tensions over deadly Israel strike on Rafah

• Natural Gas prices decline nearly 2% amid reports that Israeli opposition parties discuss plans to oust Prime Minister Benjamin Netanyahu.  
• Ireland, Norway and Spain have officially recognized the Palestinian state as strikes over Rafah continue. 
• The US Dollar Index retreats further, testing the last lines of defense.

Natural Gas price (XNG/USD) is testing this week’s low on Tuesday after prices fell on Monday due to extensive profit-taking. The decline on Tuesday comes on the back of headlines that the opposition in Israel is planning to meet on Wednesday to look for ways to oust Prime Minister Benjamin Netanyahu. Tensions build up in Israel after several world nations expressed their concerns after the attack on a refugee camp in Rafah, which killed at least 45 people. 

Meanwhile, the US Dollar Index (DXY) eases further on Tuesday ahead of the official start of the week for US markets after a bank holiday on Monday for Memorial Day. The retreat comes after warnings from Japanese Finance Minister Shun’ichi Suzuki, who pushed against any attempts to further devalue the Japanese Yen by saying that every measure is at their disposal in order to assure a stable exchange rate. The US economic agenda is set to kick off with a slew of data and four US Federal Reserve (Fed) speakers. 

Natural Gas is trading at $2.77 per MMBtu at the time of writing.  

Natural Gas news and market movers: Tensions brewing and pressure on US

• On Tuesday morning witnesses reported to Reuters that tanks have reached the outskirts of Rafah City. 
• Israeli opposition leader Yair Lapid, Yisrael Beytenu chairman Avigdor Liberman, and New Hope chairman Gideon Sa'ar are set to meet on Wednesday to discuss the creation of an alternative government and removing Israeli Prime Minister Benjamin Netanyahu from his function, KAN reports citing sources.
• Newswire Axios reported that the US is still assessing whether Israel violated a red line with the Rafah strikes. 
• Bloomberg’s Power and Gas research calculated that, despite the current hiccups in supply, the European bloc is still set to hit a 100% full Gas storage inventory ahead of the winter season.

Natural Gas Technical Analysis: US caught in its support for Israel

Natural Gas is sliding lower with rumors of possibly an opposition coalition formation that could take over power from current ruling Prime Minister Benjamin Nethanyahu, an event that could de-escalate the situation in the region. After the Rafah massacre over the weekend, international disapproval is growing and even the US is seeing how its arguments to stand by Israel are starting to run out. If a new coalition took control of the government, the current offensive in Gaza could be ended and recalled, easing tensions in the region.  

The $3.00 marker as a big figure was easily broken on Wednesday. The pivotal level near $3.07 (high of March 6, 2023) remains key as prices failed to post a daily close above it. 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) is acting as first support near $2.53. Should that support area fail to hold, then the pivotal level near $2.14 should do the trick ahead of $2.11, where both the 55-day and 100-day SMA are trading.

Natural Gas: Daily Chart