Natural gas is trading sideways, with European storage levels poised for the next heating season

• Natural gas is holding above $2.13 and maintaining support
• Markets see Europe gearing up for the next heating season, while New Zealand faces trouble ahead.
• US dollar index sees slight inflows on back of risk jitters ahead of Nvidia.

Natural gas is trading at $2.17 per MMBtu at the time of writing. Natural gas prices (XNG/USD) remain in a clear range between $2.13 and $2.36 for most of August. Demand still looks bleak, with Europe and China having lower demand for liquefied natural gas (LNG). Meanwhile, New Zealand is rapidly lifting its LNG import ban and accelerating LNG projects to solve the current energy crisis.

Meanwhile, the US Dollar Index (DXY), which tracks the value of the greenback against six major currencies, is still trying to recover from one of its worst weeks in nearly a year last week. The US dollar looks to have some support and even see some inflow again on jitters ahead of Nvidia earnings later this Wednesday after the US closing bell. Any poor performance by the tech giant could trigger a sell-off in the stock and see more US dollar inflows.

Natural gas is trading at $2.17 per MMBtu at the time of writing.

Natural gas and market news: New Zealand’s energy issues

• Bloomberg reports that Norwegian gas exports to Europe are at their lowest level in two months. The main reason for the decrease in supply is seasonal maintenance in Norway.
• Reuters reports from Australia that Inpex has canceled at least four LNG shipments scheduled for next month from its Ichthys facility due to an ongoing outage.
• Reuters reports that New Zealand’s government has vowed to lift a six-year ban on oil and gas exploration permits and wants to fast-track an LNG import project. The country has faced serious power outages in recent months.
• The recent retaliation and now the introduction of a new ballistic missile for Ukraine could mean that Russian President Vladimir Putin may even consider cutting off gas supplies to Europe entirely.

Natural Gas Technical Analysis: Not Much Moving the Needle

Natural gas prices have eased after a rather volatile summer. With a ceasefire agreement on the table for the Gaza Strip and Israel, combined European gas storage levels above 90% and sluggish demand in China, there are not many catalysts for gas prices to rise substantially. It looks like gas prices will be stuck in this sideways action for some time until a new catalyst comes in to shake things up.

If more bullish headlines emerge and push gas prices higher, look to the moving averages as resistance to the upside going forward. First, the 200-day simple moving average (SMA) and 55-day SMA near $2.30 and $2.36 would already be significant moves higher. Above, the 100-day SMA at $2.41 could be tested.

On the downside, pressure is increasing on $2.13, towards a breakdown again. If that level breaks, $2.00 is back in play for a test and a possible drop below. While still a long way off, a return below $2.00 could mean a test of the August low, with $1.93 on the cards.

Natural gas: daily chart