Natural gas price overbought signal indicates selling before reaching 2.580

Natural gas prices are rising moderately on Thursday, as optimism over the outlook for global fuel demand and looming bad weather in the United States. The Energy Information Administration (EIA) is warning about the possible negative impact of storms on the U.S. oil and gas industry this year. Meteorologists predict the upcoming Atlantic hurricane season will be particularly intense.

Storms can seriously interfere with oil and natural gas production in the United States, EIA emphasized. However, last year during the Atlantic hurricane season, none of them caused serious disruptions or damage to the facilities of the industry. The agency also warned of possible disruptions in the export of liquefied natural gas (LNG) from the Gulf of Mexico.

Meanwhile, Shell representatives said that developing countries will be the main source of LNG demand growth in the next decade. South and Southeast Asian countries will be the leaders in increasing fuel consumption.

Liquefied natural gas producers at an energy conference in Australia also expect demand to grow significantly as they approach the zero-carbon emissions target. Most developed countries expect to meet the target by 2050. Use of gas creates half as much pollution as coal.

On a technical level, natural gas quotes are in the formation of an uptrend on the H4 timeframe. The outlook for the natural gas market is optimistic as long as the price stays above the trend support. However, the divergence of the Relative Strength Index (RSI) indicator (standard values) portends a possible change in the direction of the rate towards the channel support. 

Signal:

The short-term outlook for Natural gas is to sell.

The target is at the level of 2.580.

Part of the profit should be taken near the level of 2.700.

A stop-loss could be placed at the level of 2.980.

The bearish trend is short-term, so trade volume should not exceed 2% of your balance.