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HomeFinance NewsNatural Gas Soars Amidst Ongoing Wage Negotiations for Australian LNG Workers

Natural Gas Soars Amidst Ongoing Wage Negotiations for Australian LNG Workers

Natural Gas prices surged in European trading hours, reaching $2.77 per MMBtu. The jump in prices is attributed to ongoing wage negotiations in Australia’s LNG terminals, with port authorities and workers failing to reach an agreement. If the negotiations continue to stall, it is possible that more than 10% of the world’s gas supply could be shut down by early September. This potential supply shortage is driving demand for Natural Gas futures contracts and impacting the overall technical picture.

Meanwhile, the US Dollar is expected to remain stable until Friday’s Jackson Hole Symposium. China’s sluggish economic recovery has caused the Greenback to take a small step back, but any upward movement will likely be influenced by the demand for Natural Gas. With the possible supply shortage in Australia, Natural Gas futures contracts are in high demand.

From a technical analysis perspective, Natural Gas prices are being supported by an ascending trend channel since April. If prices continue to recover, a close above $2.935 (the high of August 15) would confirm an increase in demand. Targets to watch for further upside include $3 and $3.065 (the high of August 9). On the downside, the trend channel is supported by the 55-day Simple Moving Average at $2.656, and further downside pressure could lead to a test of the lower trendline at $2.58.

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