Natural Gas Price News: XNG/USD regains $2.53 amid fears of European gas crisis, Norway supply glut
- Natural Gas snaps four-day losing streak, bounces off the lowest level in a month.
- IEA warns of European gas crisis this winter if Russia halts supplies.
- End of maintenance at multiple Norwegian natural gas rigs propel XNG/USD output.
- Downbeat US Dollar, cautious optimism about Sino-US ties also underpin Natural Gas recovery.
Natural Gas Price (XNG/USD) seesaws around the intraday high of $2.53 as it clings to mild gains during the first positive day in five amid early Tuesday. In doing so, the energy asset justifies the market’s fears of the European gas crisis while cheering the broad-based US Dollar weakness. However, headlines suggesting more gas supplies from Norway prod the XNG/USD bulls.
Although Europe has filled ample gas reserves to battle the winter, the International Energy Agency (IEA) cites the odds of witnessing a fierce problem for the old continent if Russia stops its supplies to the bloc. “The IEA said that even if Europe’s gas storage sites are filled close to 100% of capacity before October — the expectation of which has helped lower prices in recent months — that was ‘no guarantee’ against future market tensions,” said the Financial Times (FT).
On the other hand, a slew of gas fields including the giant Troll ended the regular maintenance at the facilities in the last few days, which in turn suggests increased supplies from Norway after witnessing multiple days of downbeat XNG/USD output. It’s worth noting that Norway is the second biggest gas supplier to Europe, after Russia, which in turn makes its XNG/USD updates key for the bloc, as well as for the major traders.
Elsewhere, the downbeat US Dollar and the price-positive headlines surrounding China also underpin the Natural Gas recovery. That said, US Dollar Index (DXY) drops to 99.76 while reversing Friday’s corrective bounce off the lowest level since April 2022 as the US statistics fail to inspire Fed hawks even as the July rate hike is already given. Additionally, US Climate Envoy John Kerry is in China to mark another effort by Washington to improve Sino-US ties. That said, the US policymaker met China’s top diplomat Wang Yi early Tuesday while saying, per Reuters, “Our hope is now that this could be the beginning of new cooperation to solve the differences between us.”
While the current catalysts are mostly in favor of the XNG/USD buyers, traders will pay attention to the US Retail Sales for June, expected to rise to 0.5% versus 0.3% prior, as well as the US Industrial Production for June, expected -0.1% versus -0.2% prior, for clear directions.
Technical analysis
While a clear downside break of the six-week-old support line, now immediate resistance near $2.56, keeps the Natural Gas Price on the bear’s radar, the 100-DMA puts a floor under the XNG/USD near $2.47.