Natural Gas Under Pressure: Could Feb Mirror Jan’s Last Week’s Bearish Trend?
2025.02.07 07:09
On analysis of the movements of the in the daily chart, I anticipate that the natural gas futures look ready to repeat the last week of Jan. 2025 once again next week.
Undoubtedly, the surging trade war between the United States and China has caught American gas exporters in the crossfire. They face the prospect of losing their edge in the world’s fastest-growing LNG market.
This growing chaos favors a steep fall in natural gas prices as China responded by imposing a 15% tariff on the US fossil fuels supply in response to the announcement of imposing a 10% tariff on China exports by the Trump administration.
Beijing slapped a 15% tariff on imports of U.S. liquefied natural gas after U.S. President Donald Trump announced last Saturday that he was placing a 10% charge on all Chinese imports.
I anticipate that the buyers of U.S. fuel will likely respond by redirecting more supply to Europe, where gas prices are stronger than in Asia nowadays.
On Thursday, this week’s inventory indicated a lesser withdrawal than the previous week looks evident enough to exert bearish pressure on the natural gas prices in the coming week.
Secondly, mild weather announcement for the second week of Feb. 2025 could be another factor to keep the bears on top.
Thirdly, Europe’s strong gas use may decline as coal-switching occurs, which could impact future price movements.
Technically, natural gas futures are trading in a narrow range below the 50 DMA at $3.478, indicating an advent of a steeper slide on Friday, if the natural gas futures find a breakdown, below the 100 DMA at $3.248.
Undoubtedly, the natural gas futures are trying to hold the immediate support at 9 DMA since the formation of a bearish crossover by 9 DMA has come below the 50 DMA on Feb. 4, 2025.
Finally, I conclude that the natural gas futures could retest the significant support at 200 DMA at $2.875 in the next week. If the natural gas futures find a breakdown below this important support, a steep slide could push the natural gas futures up to $2.2 by Feb. 14, 2025.
Disclaimer: Readers are advised to take any position in natural gas futures at their own risk as this analysis is only based on the observations.
