Natural Gas dips lower while Russia is getting cornered by India

Natural Gas futures slide lowers while headlines this Thursday emerge that India will not buy LNG from Russia that is sanctioned by the US, Indian Oil minister Hardeep Puri confirms to Bloomberg. Meanwhile Europe is bracing for a cold spell where temperatures are set to drop below averages. On the other hand, the recent pager and walkie-talkie bombing from Hamas members by Israel is a setback for any peace deal or ceasefire in the region. 

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, is on the back foot after the US Federal Reserve (Fed) delivered a 50 basis point (bps) interest rate cut. In its forecast, the central bank projected another 50 bps rate cut to take place by the end of 2024. Equities are having a field day on the back of this and are rallying across the globe while the Greenback is dipping lower against nearly every major currency. 

Natural Gas is trading at $2.50 per MMBtu at the time of writing.  

Natural Gas news and market movers: India says no to Russian gas

• Indian Oil Minister Hardeep Puri says to Bloomberg that if LNG from Russia is from a sanctioned facility, India will not buy it. This is anothe setback for the Russian Arctic LNG 2 facility which is struggling to find buyers. 
• European weather will come to the forefront in the coming weeks and months, with projected temperatures quite below the normal averages, Bloomberg reports.
• Uniper CEO Michael Lewis reported that Europe is well equipped to continue without the Russian gas supply, Bloomberg reports. On December 31, Austria and Slovakia will see the Russian gas flow running through Ukraine end as the transit deal will not be renewed or prolonged. 
• The International Energy Agency (IEA), meanwhile, is also planning to end Russian gas flows through Ukraine after a transit deal expires at the end of the year, Reuters reports. 
• Near 14:30 GMT, the Energy Information Administration (EIA) will release the weekly Natural Gas Storage levels. A build of 53 billion cubic feet is expected for this week after the build by 40 billion cubic feet last week. 

Natural Gas Technical Analysis: Looking for support

Natural Gas prices have topped out for now. The bullish elements that could drive price action higher, such as the end of the Russian gas transit supply, have been already priced in. Europe itself has secured enough gas to go through the upcoming heating season. The only wildcard remains the geopolitical tensions, which could drive Gas prices either way. 

On the upside, that blue ascending trend line in the daily chart below acts as a short-term resistance, near $2.62. Should the Gas price make its way above it, a longer-term uptrend could play out here. Further up, $2.80 and $2.83 (red descending trend line) are coming into play. 

On the downside, three clear levels can be identified to provide near-term and longer-term support in case prices retrace. The first is the 100-day Simple Moving Average (SMA) at $2.47. A leg lower, both the 200-day SMA and the 55-day SMA are around $2.28, just ahead of $2.13 (a pivotal level since 2023). 

Natural Gas: Daily Chart