Natural gas-analysis
2022.12.19 13:52
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Despite a gap-down opening, bulls appear prepared to rebound amid growing concern regarding the EU’s new law to cut methane emissions that contribute to global warming and an attempt to limit gas prices.
The European Union’s energy ministers met in Brussels on Monday to try to control Europe’s energy crisis. The meeting was unsuccessful.
Their attempt’s success is questioned as a result of this. This week’s direction of natural gas futures will be determined by its success or failure.
Given that the price-action of the natural gas futures appears to be under pressure from both the bulls and the bears during today’s trading session, the natural gas traders are likely to act together once a decision is made at this meeting.
On the weather front, strong to very strong demand is expected during a cold US pattern from December 17 to 26, but disappointment could result from warmer trends from December 27 to 30.
Technically, a sharp reversal could begin today’s trading session if the natural gas futures find a breakdown below the immediate support level of $6 on the daily chart.
The put/call ratio is still in favor of the bulls, so the risk is only 2%, but the reward could be over 12% this week, making the risk/reward ratio unquestionably favorable to traders.
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This analysis’s author does not hold any Natural Gas futures positions. Natural Gas is one of the world’s most liquid commodities, so readers are advised to take any position at their own risk.
