Oil & Gas

05 Jun 2023

Natural Gas Price News: XNG/USD Bulls Eye $2.30 Amid Economic Optimism, Doubts on US DOE Forecasts

05 Jun 2023  by fxstreet   
Natural Gas price extends the previous day’s rebound from one-month low.

Upbeat China data underpins hopes of recovery in demand from world’s biggest energy consumer.

US DoE anticipates XNG/USD oversupply, Chinese consumption snapped 11-year uptrend on zero-covid policy.

US avoidance of debt-ceiling expiration, doubts over central banks’ ability to further fuel rates propel Natural Gas Price.

Natural Gas Price (XNG/USD) picks up bids to refresh intraday high, extending the previous day’s rebound as the market’s hopes of economic recovery gain momentum during early Monday. However, fears of lesser energy demand and hawkish Fed concerns, as well as a firmer US Dollar, prod the XNG/USD bulls.

US President Joe Biden signed the debt-ceiling bill and avoided the ‘catastrophic’ default, which in turn triggered economic optimism the last Friday.

On the same line is the latest improvement in China data. Earlier in the day, China’s Caixin Services PMI matches 57.1 market forecasts for May versus 56.4 previous readings.

Elsewhere, geopolitical fears surrounding the US, China, Russia and Ukraine also underpin the XNG/USD rebound amid challenges to energy supply.

It should be noted, however, that the US Department of Energy (DoE) predicts the Natural Gas demand increasing by 1.0% but the supplies are likely to grow by 2.0% and hence suggest a 1.0% more supplies over the demand. However, Analysts at Forbes raise doubts about such forecasts.

On a different page, S&P Global Commodity Insights mentioned the first yearly decline in Chinese demand for Natural Gas since 1990 during 2022. However, the drawdown in the XNG/USD was mainly because of the nation’s zero-covid policy and hence the economy’s recent re-opening raise expectations of further Natural Gas demand.

Amid these plays, the energy instrument consolidates the previous monthly losses ahead of the key US ISM Services PMI and Factory Orders for May. Should the scheduled data defy downbeat expectations and print strong outcomes, the XNG/USD bears will have an additional reason to return to the desk.

Natural Gas Price technical analysis

A daily closing beyond a two-week-old descending resistance line, around $2.28 becomes necessary for the Natural Gas buyers to aim for the $2.30 round figure.


More News