Natural gas prices under pressure as traders weigh global supply
Natural gas chart highlights $3.522 resistance level
Natural gas prices are trading at $3.341, reflecting a modest 1.00% gain on the 4-hour chart. The $3.522 resistance level, reinforced by a downward trendline, acts as a critical hurdle. A decisive move above this could trigger a test of the next resistance at $3.579.
On the downside, immediate support is seen at $3.258, followed by a stronger floor at $3.206. A breakdown below this could expose natural gas prices to further declines, targeting the key support zone near $3.152 and $3.079. The 50 EMA at $3.285 and the 200 EMA at $3.206 highlight continued bearish pressure, though bulls appear to be testing short-term resistance.
Natural gas chart (Nov 2024 - Dec 2024) Source: Trading View
Energy Secretary Jennifer Granholm has warned against “unfettered exports” of liquefied natural gas (LNG), citing potential domestic price hikes and increased carbon emissions. A U.S. Department of Energy report highlighted that unchecked LNG exports could raise domestic prices by 30% and disrupt renewable energy expansion. The incoming U.S. administration, however, has pledged to ease LNG export restrictions.
European market dynamics: supply fears and hedge fund bets
In Europe, natural gas futures rebounded above €41.5 per megawatt-hour, driven by concerns over the expiring Ukraine gas transit deal. Hedge funds, including Citadel and Millennium, have built large long positions, risking a potential market selloff if fundamentals shift. Meanwhile, European gas inventories remain healthy at 96.4 bcm, with withdrawals well below seasonal averages.
Natural gas markets remain at a crossroads, balancing policy risks, European supply dynamics, and global trade uncertainties. Prices could face further volatility depending on upcoming U.S. policy shifts, European inventory levels, and geopolitical developments.
Previously, we discussed natural gas price declines due to improved European supply conditions and technical resistance holding near $3.14. These factors continue to shape near-term price trends.
