Weekly Outlook on Natural Gas

Weekly Forecast: Natural Gas                                                                                       

Natural Gas futures experienced a volatile move on Thursday as headlines emerged indicating India's refusal to purchase Russian LNG sanctioned by the United States. This decision, confirmed by Indian Oil Minister Hardeep Puri to Bloomberg, comes as Europe braces for a cold spell with temperatures expected to drop below average. Meanwhile, the recent bombing attacks by Hamas members in Israel have set back any prospects for a peace deal or ceasefire in the region.

Natural Gas futures experienced a volatile move on Thursday as headlines emerged indicating India's refusal to purchase Russian LNG sanctioned by the United States. This decision, confirmed by Indian Oil Minister Hardeep Puri to Bloomberg, comes as Europe braces for a cold spell with temperatures expected to drop below average. Meanwhile, the recent bombing attacks by Hamas members in Israel have set back any prospects for a peace deal or ceasefire in the region.

The U.S. Dollar Index retreated following the Federal Reserve's 50 basis point interest rate cut. The central bank's forecast suggests another 50 basis point rate cut by the end of 2024. Global equities rallied in response to this news, while the U.S. dollar weakened against most major currencies.

Natural Gas prices have reached a temporary peak. The bullish factors, such as the end of Russian gas transit supply, have already been factored into the market. Europe has secured sufficient gas to weather the upcoming heating season. The only remaining uncertainty is the geopolitical situation, which could influence Gas prices in either direction.

Technical Outlook on Natural Gas: 
Natural gas prices on the daily chart are sustaining above the 200-day Exponential Moving Average and hovering near the 38.2% Fibonacci retracement level, indicating potential strength. The price has also managed to stay above the support of the Middle Bollinger Band, accompanied by higher volume activity. Momentum indicators show a positive crossover, holding above the 56 level, signaling bullish sentiment in the short term.

On the weekly chart, the price is consolidating above the prior swing highs of Rs. 192 but remains below the Ichimoku Cloud, pointing to long-term bearishness. However, in the short term, if the price sustains above Rs.192, a limited upside move is possible, with resistance expected around Rs. 208 and 215 levels. On the downside, Rs. 186 serves as an immediate support, followed by Rs. 177. Traders are advised to keep an eye on storage data and these critical technical levels.

Important Levels of Natural Gas: