Natural Gas set for increased volatility as Australian unions lose control on strikes

• Natural Gas price jumps in the US and Europe. 
• The US Dollar is set to weaken after its relentless peak last week. 
• Uptrend still intact as price heads to $3.25.

Natural Gas price is jumping higher this morning in the US (+2.7%) and more substantially in Europe (+8%) as a perfect storm is brewing on the supply front. Several reports are coming in that Australian unions are losing control of the situation as several independent strikes are emerging in the port sector, putting at risk again the 10% volume of global gas supply for the coming weeks. To make matters worse, Norway is reporting that supply has been halted from its Troll field since Saturday for planned maintenance. 

The US Dollar (USD), in the meantime, is facing some selling pressure after it peaked several times last week. The US Federal Reserve Chairman Jerome Powell reiterated that rates need to remain elevated for longer, which dampened the hope that was living in the markets for rate cuts in early 2024. These hopes are now placed toward the end of the second quarter. For this week,  traders will be on edge with the US jobs report on Friday. 

At the time of writing, Natural Gas is trading at $2.818 per MMBtu.  

Natural Gas news and market movers

• India’s Gujarat State Petroleum Corporation is seeking to buy one cargo for late September delivery, according to inside traders. The tender is due to expire on August 28. 
• European gas storage is at 92%, while France is lagging a touch with 88%.
• Norway has shut down its Troll gas field for maintenance, in another setback for European gas supply. 
• Australian LNG workers are firing up local and independent strikes as unions are normally rounding up the voting on Monday for the improved Chevron wage proposal. The independent strikes make it more difficult for the unions to bring forward one single plan for all workers and local disruptions might trigger bigger supply issues further down the line.  
• Tropical storm Idalia is set to hit Florida by Tuesday. Bigger parts of Alabama and Georgia are bound to be hit as well once it hits landfall.   
• This week, all eyes on the market moving US jobs report on Friday. 

Natural Gas Technical Analysis: crossing the river

Natural Gas is a textbook example of how technical analysis together with macro and fundamentals is a cocktail that works. Last week any news was in disfavor of the commodity, though support held and the ascending longer term trend channel is still very much intact. Seeing the current cocktail of supply drought, Natural Gas prices could jump to $3.25 if the current sentiment and the news flow keeps contributing to higher prices. 

On the upside, $3 is still the level to watch once Natural Gas prices can reclaim $2.9. Should prices recover, look for a close above $2.935, the high of August 15, in order to confirm that demand is picking up again. More upside toward $3 and $3.065 (high of August 9) would be targets or levels to watch. 

On the downside, the trend channel has done a massive job underpinning the price action. Aside for one small false break, ample support was provided near $2.60. The 55-day Simple Moving Average needs to give that much needed support at $2.69 ahead of the ascending trend channel at $2.61. Any falling knives can still be caught by the 100-day SMA near $2.55.

XNG/USD (Daily Chart)