It has been more than half a year since I shared the post of singing more natural gas last time. After a big shock, the US natural gas futures price has just broken 5 from the original, and has come to the position of more than 7 dollars
When it comes to the reason why American natural gas prices keep breaking new highs, this is of course related to the current inextricable Ukrainian-Russian war.
On the one hand, the intensification of military conflict will certainly bring upward stimulus pressure to energy prices. On the other hand, Due to the sanctions imposed on Russia by Europe, America and other countries and some countries in the Asia-Pacific region, It is difficult for energy products to be transported to all parts of Europe as before, which leads to global gas shortage and oil shortage. Although the United States has released crude oil reserves and increased natural gas production to make up for the current situation of gas shortage in Europe, a large number of demand gaps in Europe still cannot be met, so natural gas shows a rare trend of continuous rise.
From the perspective of inventory, the current inventory in the United States and Europe is in a very low position, and the current situation of gas shortage is clear
European natural gas stocks:
US Natural Gas Inventory:
According to the global balance of supply and demand calculated by EIA, Asia-Pacific and Europe are the most gas-deficient regions this year.
What's more, Europe will impose an energy embargo on Russia.
At present, some European officials are drafting an embargo plan for Russian oil and gas products, and the proposed embargo measures of the European Union will be negotiated as early as April 24th after the final round of French general election.
Overall, the EU relies on Russia for 26% of its crude oil imports, according to Eurostat, which meets 37% of the bloc's energy needs in 2020. In terms of natural gas, the EU is more dependent on Russia. According to Eurostat, 46% of the EU's natural gas imports came from Russia in 2020.
If you guess correctly, the biggest driving force for this sharp rebound from the bottoming out of US natural gas at around US $4 on March 14 comes from European sanctions on Russian energy,
Because the market didn't believe that Europe would really cut off the energy channel of its own market to sanction Russia, the price of natural gas didn't rise too high. However, after the current embargo plan began to be drafted and Russia asked Europe to exchange rubles for energy, people discovered that the natural gas shortage in Europe really couldn't escape.
In addition to the shortage of gas in Europe, the price of natural gas has soared, and there are also short-term natural gas reasons in the United States.
At present, the price of natural gas in the United States has soared to a 13-year high, briefly exceeding $8 for the first time since 2008. The climate department predicts that the temperature in parts of the northern United States is expected to be lower than normal from April 25 to May 1. That could increase demand for fuel for heating and power plants, and coal shortages in the U.S. have also contributed to higher natural gas prices, limiting power producers' ability to switch fuels. This part of the benefits has also been included in the natural gas price in the near future
With such a high price, you should be careful if you do too much
We can see that the RSI index in natural gas futures prices has risen to the highest level since 2018. Usually, in this form, there will be a technical retracement to make up for the buying, so you may have to be careful about the retracement range of more than 10 points if you do more.
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However, from the monthly chart, the price of natural year has broken through the previous high point. If there is no obvious bad news in the near future, it cannot be ruled out that the price will touch the high point above 8 upwards, because there is no obvious resistance level technically.
The only one in the natural gas marketThe biggest negative is the temperature. If Europe and the United States enter the mild climate period in summer one after another, the demand for natural gas will drop, and the price will naturally be counted as a negative and there will be a sharp retracement. If the retracement is deep enough, it will also be a good opportunity for natural gas to get on the bus.
$Natural Gas - main 2205(NGmain)$ $E-mini Dow Jones - main 2203(YMmain)$ $Gold - main 2206(GCmain)$ $E-mini S&P 500 - main 2203(ESmain)$
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