Natural Gas flat as Saudi Arabia, UAE warn markets about tensions

• Natural Gas prices are steady on Wednesday but futures on European markets jump.
• Markets see tensions simmer amid uncertainty about Israel’s retaliation against Iran.
• The US Dollar Index consolidates after Fed Chairman Powell confirms delay in interest-rate cuts. 

Natural Gas (XNG/USD) trades flat in a narrow range on Wednesday, digesting the overnight headlines that came out about lingering tensions in the Middle East. White House National Security Advisor Jake Sullivan said to Bloomberg that the outline of the sanctions against Iran will come in the following days and will specifically target the country’s drone plan. Meanwhile, in the Middle East, Saudi Arabia’s Crown Prince Mohammed Bin Salman and UAE President Mohammed Bin Zayed Al Nahyan issued a rare joint statement calling for self-restraint and pointed to the dangers of war. 

Meanwhile, the US Dollar Index (DXY) is weakening after its staggering five-day winning streak. Some further easing is in the cards with a very light economic calendar ahead and markets no longer looking to force the US Federal Reserve to change its stance. US Federal Reserve Chairman Jerome Powell said on Tuesday that current inflation levels do not call for a rate cut, suggesting that interest rates will stay steady for longer until inflation comes down. 

Natural Gas is trading at $1.90 per MMBtu at the time of writing.  

Natural Gas news and market movers: A war that no one wants 

• The Barrow North LNG terminal in the United kingdom is undergoing an unplanned maintenance call. Meanwhile, Gas flows from Norway to Europe are recovering after a series of unforeseen outages at some of its major fields.
• Local European Gas Futures have risen by 20% in just five days. Prices are likely to ease, though, as Norwegian flows pick up to normal volumes again.
• European Gas storages are filled up by 62% and are set to get refueled over the summer period.
• Headline risks are still in the balance on Wednesday as markets await details over Israel’s retaliatory measures against Iran. 

Natural Gas Technical Analysis: A short breather, enjoy it while it lasts

Natural Gas prices are in a soft patch on Wednesday, for as long as no clear headlines out of Israel hit the wires on what the next steps will be on Iran. The breather should give prices some room for a small retrace, though nothing substantial. With headline risk at hand, expect the main support barriers to remain unchallenged. 

On the upside, the red descending trend line at $1.99-$2.00 looks ready for another test. Should Gas prices snap above it, a quick rally to $2.11 could be seen. Not that far off, $2.15 in the form of the 100-day Simple Moving Average (SMA) becomes the main resistance level.

On the downside, the 55-day SMA around $1.88 should be a safety net. Next, the green ascending trend line near $1.83 should support the rally since mid-February. Should even that level break, a dive to $1.60 and $1.53 would not be impossible. 

Natural Gas: Daily Chart