As per the statistics shared by BitTribute.com, The price of natural gas declined as the trading week ends. A large twofold peak pattern indicates that natural gas will continue to fall.
Experts argued that there are no signs of recovery in gas prices as the energy crisis in Europe remains unresolved and Russia’s invasion of Ukraine still goes on. Conversely, the experts are talking that to what lengths the price of natural gas can further decline.
On the flip side, the technical outlook of natural gas hints further bearish trend. It has been predicted that February 2023 will be warmer than usual, and as the result, the demand for natural gas will decline.
The Decline in Natural Gas Demand Will Cause Further Decline in the Gas Prices
Currently, the gas demand is not low only in the U.S. Talking of Europe, the winters are milder than the expectations.
As the result, the last year's massive resources of gas which remained unused in previous winters are sufficient to meet the demand this winter.
This has contributed to lower gas demand in Europe as well. According to multiple reports, by the end of January 2023, 72% of the gas reserves remain unused.
Apart from that, China’s industrial shutdown because of Covid-19 caused a decline in the demand for Chinese LNG.
Experts advised that Chinese authorities need to relax the Covid-19 regulations for Chinese industry to operate at its fullest efficiency this will give some strength to the demand for Chinese LNG.
Chinese industry operating at its peak will also see an increase in the demand for global LNG as China needs to import more LNG to f.
Natural Gas Technical Price Outlook; what will be the Future Price of Natural Gas?
The technical data showed that since the end of 2020, natural gas is constantly bearish in terms of its price till today.
Over the past 24 hours, its price further declined, on the weekly chart the gas price continuously declined throughout the week.
It has occurred that if the bears continued to bring the gas prices below, they will reach the 202 low of 1.44 – 1.61.
As of this writing, the gas price heading toward seven weeks of continuous losses. However, alone this week the price of natural gas plummeted by 13.4%.
On, Wednesday this week the price of natural gas slipped by 8.05%, this was the worst single-day decline in 2023 since the 5th of January.
Currently, the price of natural gas is 2.410, which accounts for the -1.87% plunge. If the current downtrend lasted a bit longer the next level of resistance for natural gas would likely be 2.326.
As the demand for natural gas is declining further and further, some of the biggest energy sector companies are struggling very hard to perform well in the money market.
Experts are skeptical of investing in natural gas, moreover, experts have also advised that investors should refrain from buying energy stocks.
As far as the recovery is concerned, as of now there are no promising signs that natural gas prices can come back stronger.
However, the current downward momentum on the technical charts raises the chances for natural gas to fall lower than the 2.25 mark. This is likely to pave the way for the horizontal trend from 1999, at the 1.45-1.50 mark.
But the current average is at 2.90. But, the greater level of resistance can be seen at the January 24 high of 3.60.
From the investors' point of view, natural gas investment is risky. The technical charts show no promising signs of price recovery any sooner.
Apart from that, the environmental outlook is also not feasible for natural gas producers because the demand for natural gas in both the U.S. and Europe seems to decline.
Currently, natural gas is encircled by strong market bears and its price is likely to go further and further down.