Natural Gas in distress with selloff adding another leg

• Natural Gas snaps below $2.50 and flirts with a six-week low. 
• A Louisiana judge has lifted Biden’s ban on new licenses for LNG exports. 
• The US Dollar index rallies higher and pops above 106.00 on concerns about a Trump win. 

Natural Gas price (XNG/USD) sinks lower yet again, snapping below $2.50 and extending its losing streak for a sixth day in a row. Over 15% in value has already evaporated since June 25th, and more downturns could be at hand as a US judge in Louisiana issued a ruling on Monday to lift the current ban on new export licenses for Liquified Natural Gas (LNG). The Biden administration had issued a ban for new LNG export licenses a few months ago, in order to meet demands from climate changes and reforms. 

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is having a field day and rallies higher on concerns in the bond markets. With former US President Donald Trump in the lead now in recent polls, his spending plan is a concern for the bond market. With ample amounts of spending, the US debt would become intolerable, while other measures, such as tariffs, are hardly enough to offset any big spending promises. 

Natural Gas is trading at $2.46 per MMBtu at the time of writing.  

Natural Gas news and market movers: More supply to hit markets 

• US District Judge James D. Cain Jr. in Louisiana has decided in favor of 16 states that opposed US President Joe Biden’s current export moratorium on new LNG projects, Bloomberg reports. 
• Bloomberg’s Energy Desk is forecasting that any supply glut in LNG will be absorbed by 2030 as several new projects currently are facing substantial delays, which means not being operative by the time already operational plants are set to near the end of their lifetime cycle. 
• European Gas prices are facing less downturn, with several regions experiencing substantially elevated temperatures, and sparking demand for electricity in order to keep air conditioners performing, Reuters reports. 

Natural Gas Technical Analysis: The pain trade 

Natural Gas price has snapped the important 200-day Simple Moving Average (SMA) support near $2.53. With that break lower, Gas price is now trading below $2.50. With not much level to go on, the only next support near is still 8% lower, while the Relative Strength Index (RSI) is not yet nearing its oversold barrier. 

The 200-day SMA turns now as  a resistance, near $2.53. Once back above there, the pivotal level near $3.08 (March 6, 2023, high) remains key resistance after its false break last week, which is still 20% away. In addition, the red descending trendline in the chart below at $3.10 will also weigh on this area as a cap. Further up, the fresh year-to-date high at $3.16 is the level to beat. 

On the downside, the next target could be the pivotal level near $2.13, with interim support by the 100-day SMA near $2.25 

Natural Gas: Daily Chart