NatGas Extends Gains on Better Supply-Demand EquilibriumNatural Gas prices run their second straight profitable month, covering the Q1 losses and starting the current week on the front foot. This brings the yearβs highs in the spotlight (3.3974), but bulls will need fresh impetus for taking them out. The RSI points to highly overbought conditions though, making the commodity ripe for a pullback towards the EMA200 (black line). A move below them would pause the upside bias, but that looks like a toll order under current technical and fundamental conditions.
The advance in natural gas prices is largely due to the improvement in supply-demand dynamics, which can drive further gains. Leading drillers have offered subdued 2024 guidance, while Europe is looking to include LNG in its sanctions against Russia. On the other side of the equilibrium, the outlook on global and Chinese consumption is optimistic. However, there are risks around demand, like Europeβs cuts, Chinaβs bumpy recovery, US elevated stocks and historically warm weather.
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