Weekly Outlook on Crude Oil - 8 September 2023

Natural gas prices rebounded after the EIA report on Thursday. As per the report, working gas in storage grew by 18 billion cubic feet for the week, which was below the average increase of 29 bcf forecast by analysts surveyed by S&P Global Commodity Insights. In addition, traders are also keeping an eye on the developments in Australia, Woodside Energy reached an agreement with the unions at Australia’s LNG project, potentially averting a disruption to supplies from one of the world's biggest exporters of super-chilled fuel. However, the U.S. market will not be impacted by the development in Australia, but the potential strike could be a positive for natural gas prices in the U.S. as consumers would rush to buy LNG everywhere they could find it. 

Natural Gas prices inched up after EIA report

NYMEX Natural gas prices triggered a bearish continuation early in the session but towards the end witnessed a pullback move. Initially, the price breached its prior low of 2.470, before finding support around 2.425 and bouncing back. Finally, the daily candle ended in green after being red earlier and closed back above 2.470 levels on Thursday. On the Friday session, the prices were promising bullish strength and hovering above the prior day's close. On the daily timeframe, the price has tested support at 50% Retracement Levels of its prior upward rally and reversed further. For the coming days, if the natural gas price sustains above 2.570 levels on a closing basis, then bulls can take control and start recording a positive target at 2.950 followed by 3.557. However, if the price declines below the mentioned support and provides a negative close, that will confirm its negative pressure between 1.950 and 1.650. 

On the MCX exchange, natural gas turned up from the prior support at 203. The price dragged below it and set a low at 200.60 on Thursday session but managed to settle above the support levels. However, in the first half of the session, the prices were under pressure, but after the inventory data, we witnessed a sharp pullback in the counter. On Friday, the price opened slightly lower and traded sideways in the early session. On the daily scale, the price took support at Rising Trendline and 100-days Simple Moving Averages and showed pullback moves. However, RSI and other momentum indicators are still looking weak and suggesting bearishness for the near term. Hence, one should keep an eye on the ongoing fundamentals and market events that can drive prices further. Technically, there is strong support at around 200 levels. Once the prices slip below it, will confirm the negative affection by strong selling pressure. However, on the upside, if the price sustains above 215 can see positive moves towards 224 and 235 levels.  

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