Weekly Outlook on Natural Gas - 03 November 2023

​On Thursday, the decline in natural gas prices by -0.96% to 288.60 is attributed to record output levels and forecasts of milder weather. Lower heating demand expectations for the next two weeks and an increase in US gas storage by 74 billion cubic feet, though slightly below expectations, contribute to this trend. LSEG reports robust gas production, averaging 104.1 billion cubic feet per day in October. Meteorological predictions signal a shift to near-normal conditions from November 3-14, reducing gas demand. Despite a decrease in pipeline exports to Mexico, gas flows to US LNG export facilities increased in October.

The daily chart indicates natural gas prices moving above the Channel formation and 21-days SMA level. Despite this, negative divergence in the RSI momentum indicator suggests a lack of buying strength. Volume activities do not support the buying structure, so anticipating a correction in the near term; one might consider short positions around the 297-298 mark. Support levels are projected at 280/270, while resistance is expected at 305/315. Traders are advised to focus on inventory data and evaluate market conditions closely before making investment decisions.

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