European Gas Prices Gain on Australia LNG Workers’ Ultimatum
The price of natural gas rose above Friday’s peak as a result of the failure of Australia’s negotiators to reach an accord. The port authorities and employees at one of the most important LNG terminals in Australia are unable to reach a wage agreement. If no agreement is reached by the first week of September, more than 10 percent of the world’s supply could be halted in Australian ports and terminals, signaling a potential closure of more than 10 percent of the world’s supply.
In the interim, it is not anticipated that the US dollar (USD) will exhibit any significant volatility before Friday. The dollar even takes a slight step backwards on Monday as markets shake off the gloom caused by China’s sluggish economic recovery. Consequently, any gains will be fundamentally determined by the demand for natural gas futures contracts in the aftermath of a possible Australian supply shortage.
- During European trading hours, natural gas prices increased to $2.77 before reversing as US markets opened.
- In anticipation of Friday’s Jackson Hole Symposium, the U.S. dollar moves sideways.
- An essential technical indicator supports natural gas in the overall technical picture.
Natural gas market news and influencers
TotalEnergies acquires 26% of the Australian AC-RL7 permit.
Overnight data revealed a 24.3% increase in China’s LNG imports for the month of July.
China is establishing or expanding additional trading centers in London, Singapore, and Qatar in order to increase its LNG imports.
The mainland Chinese yuan is at its weakest level since November of 2022. China’s economic recovery is faltering, which could lead to a reduction in demand on international gas markets.
France’s gas storage levels have increased to 86%, with Europe’s levels reaching 91% ahead of schedule.
European gas futures increased by 18% in response to the ultimatum issued by Australian employees.
According to Bloomberg gas analyst Daniela Li, China’s LNG import growth will decelerate during the winter. In the past two years, China has secured 37 long-term contracts, which could lead to an oversupply by 2024.
Tropical Storm Hilary has struck the Californian mainland. There have been no reports of infrastructure or pipeline failures in the gas distribution network as of yet. Nevertheless, potential inundation could still cause infrastructure damage.
The highlight of the week will occur on Friday, when the annual Jackson Hole Symposium will take place. In such a scenario, the Federal Reserve of the United States tends to signal a change in its monetary policy in the future.
Technical Analysis of Natural Gas Intraday Gains
The price of natural gas is increasing as a result of news reports from Australia, where negotiations are still ongoing but shutdowns at the beginning of September appear inevitable. The 10% reduction in supply from that point on should not be underestimated and demonstrates how fragile price stability is. US natural gas futures are up 2.8% intraday, while European natural gas futures are up over 13%.
On the upside, $3 remains a key level as the overall ascending trend channel established in April continues to be respected. If natural gas prices recover, a close above the 15-August high of $2.935 will indicate that demand is once again rising. Additional gains toward $3 and $3.065 (the 9 August high) would be important targets or levels to monitor.
On the downside, a 55-day simple moving average (SMA) at $2.656 is supporting the price, as indicated by the trend channel. In the event that additional downward pressure develops, watch $2.58, which corresponds to the channel’s lower trendline.
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