Spot natural gas prices continued to rise in their recent trading at the intraday levels, to achieve new daily gains until the moment of writing this report, after it advanced in yesterday’s trading by 7.19.
Russia’s Gazprom has declared force majeure on natural gas supplies to Europe for at least one major customer, Reuters reported on Monday, citing a letter from Gazprom. Declaration means that the company cannot fulfill delivery obligations due to unusual circumstances.
Meanwhile, IEA Executive Director Fatih Birol said on Monday in a published comment that the world is “going through the first real global energy crisis in history” and that the IEA has been warning for “many months and the situation is particularly precarious in Europe”.
He said that Europe “needs to do everything in its power to reduce the risks of a major gas shortage and rationing it, especially during the coming winter.”
Meanwhile, natural gas has historically been used mostly for heating, and has tended to fluctuate depending on how cold the winter gets. But it has become a prominent source of electricity in the United States and elsewhere. Heat waves in Europe including record temperatures expected in London and the United States this summer mean more people are using air conditioners, causing demand for electricity to rise.
Technically, the price managed in yesterday’s trading to breach the current resistance level 7.254, in light of the dominance of the main bullish trend in the medium term and its trading along a minor bullish slope line in the short term, as shown in the attached chart for a (daily) time period, with the continued presence of positive signals on the relative strength indicators. Despite reaching overbought areas, the price is trying in its recent trading to get rid of the negative pressure of the simple moving average for the previous 50 days.
Therefore, our expectations indicate more ascent for natural gas during its upcoming trading, provided that its upcoming trading is stable above the level of 7.254, to target the first resistance levels at 8.054.
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