Natural Gas Price News: XNG/USD consolidates Fed-inflicted losses near $2.70 as Russian Gas output drops
- Natural Gas Price recovers after posting the biggest daily loss in two weeks.
- Federal Reserve’s rate hike, readiness for September lift weigh on XNG/USD even as US Dollar remains depressed.
- Russian gas output drops 14.9% during January-June period.
- Risk catalysts, US GDP eyed for clear directions of the Natural Gas Price.
Natural Gas Price (XNG/USD) takes clues from Russia to pare the biggest daily loss in a fortnight around $2.70 during early Thursday morning in Asia. In doing so, the XNG/USD also reverses the Federal Reserve (Fed) inflicted losses as the US Dollar lacks upside momentum while market sentiment improves.
As per the latest Russia Natural Gas output data from the Rosstat statistics office, per Reuters, the natural gas output reached 267 billion cubic meters (bcm), down 14.9% from the same period in 2022. The energy update also states that Russia produced 34.6 bcm of natural gas in June, down 11.9% from the same month last year. On the same line, Russian Energy Minister Nikolai Shulginov tells Moscow media TASS that Russian Gas output forecast to decline in 2023 to 657 bcm.
On Wednesday, Federal Reserve (Fed) matched the widely forecasted increase of 25 basis points (bps) to the benchmark Fed rates toward the multi-year high in the range of 5.25%-5.50%. Following the rate decision, Fed Chairman Jerome Powell tried to placate the hawks by showing readiness for a September rate hike as he said, that the June inflation Consumer Price Index was welcomed but “was only one month's report.”
It should be noted that the rejection of recession fears was also an effort to please the US Dollar buyers but failed. However, the commodities failed to cheer the USD’s weakness and rather slumped amid disappointment that the end of the global rate hike trajectory isn’t near.
Apart from the US Dollar weakness and Russia-inspired move, the market’s optimism ahead of the advance readings of the US Q2 GDP Annualized, expected to ease to 1.8% from 2.0%, as well as the Durable Goods Orders for June, likely easing to 1.0% from 1.8% prior (revised), also favor the XNG/USD bulls.
Additionally, a likely easing in the US Energy Information Administration’s (EIA) Natural Gas Storage Change for the week ended on July 21, from 41B to 23B, also underpins the XNG/USD rebound.
Technical analysis
Repeated failures to cross the three-week-old horizontal resistance area surrounding $2.78-79 directs the Natural Gas price towards the 21-DMA support of around $2.66.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
