NATURAL GAS PRICES
Natural gas prices were trading below $7.0 and were set for a 16% weekly drop, its steepest fall in 2022, after data showed the inventories grew in the latest week. The EIA weekly report showed utilities injected 92 bcf of natural gas in underground storage, roughly in line with median estimates of 91 bcf, which is well above the 5-year average build of 79 bcf. At the same time, traders are expecting an additional 40 bcf of natural gas to be available in the domestic market, as Freeport LNG’s export facility is set to remain offline for several months due to lengthy repair works. Meanwhile, the demand from overseas is set to remain strong after Gazprom halted significant amounts of supplies to EU countries, including a 60% cut in Nord Stream pipeline flows to Germany. The first resistance to be tested is 7.02 and first support on a decline is $6.35 Level.
The dollar index eased toward 104.4 in thin holiday trade on Monday, giving back some gains from the previous session, but remains close to a 20-year high reached last week as expectations that the Federal Reserve will continue to aggressively tighten monetary settings supported the currency. The Fed raised its benchmark interest rate by 75 basis points last week, the largest increase since 1994. In the latest commentary, Fed Governor Christopher Waller said Saturday he would support another hike of a similar scale at the central bank’s July meeting should economic data come in as he expects. Meanwhile, Cleveland Fed Bank President Loretta Mester warned Sunday that the risk of a US recession is increasing, and that it will take several years to return to the central bank’s 2% inflation goal.