- Natural Gas begins Monday’s trading with a downside gap after two-week uptrend.
- Slightly upbeat US Natural Gas production, fears of slower China economy and US holiday allow XNG/USD to pare recent gains.
- Bears remain off the table amid geopolitical, environmental fears suggesting supply crunch.
- Risk catalysts eyed for fresh impulse amid US Labor Day Holiday.
Natural Gas Price (XNG/USD) began Monday’s trading with a downside gap and printed the biggest daily loss in three weeks so far even as the energy instrument recently bounced off its intraday low to $2.82 amid the market’s indecision.
In doing so, the XNG/USD fails to justify the price-positive headlines from the energy industry, mainly surrounding the supply and demand forces, amid the market’s consolidation as the US traders cheer the Labor Day holiday.
Reuters conveyed the latest US Energy Information Administration (EIA) data to suggest a 4.0% jump in the Gas output versus a slump in the number of rigs drilling for gas, to an average of 121 in August 2023 from a peak of 159 in April 2023, per Reuters. With this, the XNG/USD traders cheer the US Dollar’s positioning for this week’s US ISM Services PMI, especially when the US-China tension escalates and China braces for more privatization of the economy, per the latest comments from China President Xi Jinping.
Further, the fears of natural calamities roiling the gas supplies and allowing the XNG/USD to remain firmer also put a floor under the Natural Gas price.
The reason for the XNG/USD positioning could be linked to the US Dollar’s sustained run-up, as well as the headlines suggesting higher Gas inventories, to around 132 billion cubic feet versus the prior ten-year seasonal average on Aug. 25.
Moving on, the supply–demand scenario keeps the XNG/USD buyers hopeful despite the latest pullback. As a result, headlines about China and other risk catalysts will be important for fresh impulse.
Technical Analysis
Friday’s Gravestone Doji candlestick on the daily chart keeps the Natural Gas price pressured towards the 100-day Exponential Moving Average (EMA) support of around $2.76 unless the quote stays firmer past the previous day’s top of $3.00.
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