Spot natural gas pops higher after NATO meeting

Spot natural gas trades at 7 week high

Natural gas prices are trading up 4% so far today and are at the highest level since early February. Putting this into context spot natural gas prices are double what they were this time last year.

Concerns over supply amid the ongoing Russian war are exasperating an already tight market.

In the latest developments, the headlines following the NATO meeting today revealed that the group agreed to strengthen forces in eastern Europe, increase aid to Ukraine and tighten sanctions on Moscow - moves which are likely to strain relations further.

Yesterday, Putin announced that payment for natural gas will be switched to Russian roubles, in an effort to boost the national currency. However, he stressed that Russia would continue to supply energy resources.

Europe depends on Russian gas for 40% and is now in the difficult position of choosing between its own energy security or propping up the Russian currency.

Gas futures which are tied to TTF, Europe’s wholesale gas price, closed 9% higher yesterday. The move in spot natural gas was more modest.

The switch is unlikely to be simple. It would seem likely that contracts would need to be renegotiated from current terms of payment which are euros. Even so, this has been a key point in the war so far. It shows that Putin is prepared to risk ongoing gas contracts as the war deepens and the confrontation with the West escalates.

This is uncharted territory and is placing upward pressure on gas prices.

Learn more about trading natural gas

Where next for spot natural gas?

Spot natural gas trades within a triangle pattern and appears to be on the verge of a break-out. The price has been steadily climbing, supported by the 50 SMA and the multi-week rising trendline.

Today’s pop higher has taken the price to the multi-month falling trendline resistance. The RSI is supportive of further upside.

A break above the falling trendline could see the price breakout towards 5.727 2022 high, before bringing 5.991 the October high into focus.

Failure to break out the rising trendline could see the price rebound lower back towards the rising trendline and the 50 sma at 4.713. A move below here would expose the 100 sna at 4.430; a move below here could see the near-term bias change to bearish, bringing 3.975 into play.

How to trade with City Index

Follow these easy steps to start trading with City Index today:

Open a City Index account, or log-in if you’re already a customer.
Search for the market you want to trade in our award-winning platform.
Choose your position and size, and your stop and limit levels
Place the trade.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.