Natural Gas soars to highest level since October on new EU sanctions
Recall that last week Russian President Putin had threatened to shut down the flow of gas from Russia to Europe if it was not paid in Rubles. Both Germany and France said no, and Putin showed his hand, leaving the pumps on for now. However, the EU has been discussing the idea of banning energy imports from Russia since the beginning of the war. After the atrocities committed by Russian forces in Bucha, Ukraine, the EU finally committed to new sanctions, including a ban on all coal imports. As a result, natural gas is in high demand and traders are pushing prices higher to levels not seen since early October 2021.
On October 6th, 2021 Natural Gas made a high of 6.427 and pulled back to a low of 3.572 by December 7th, 2021. Natural gas prices have been extremely volatile since then, trading back up to 5.728 on February 2nd, only to retreat and fall to 3.938 just 7 days later. The energy commodity has been on the move higher since then. On March 31st, Natural Gas moved above those February 2nd highs and today, price reached its highest levels since the October 6th high. Can it continue higher and take out that level?
Source: Tradingview, Stone X
On a 240-minute timeframe, Natural Gas has been trading higher in an orderly channel since March 14th. Price is currently testing resistance at the top trendline of the channel near 6.149. If price continues higher, the next resistance level isn’t until the October 6th, 2021 highs at 6.427 (see daily). However, notice that the RSI on both the daily timeframe and the 240-mintue timeframe are in overbought territory, an indication that natural gas may be ready for a near-term pullback. First support is at the breakout level above the October 27th highs at 5.991, then the February 2nd highs at 5.728. Below there, price can fall to the bottom trendline of the upward sloping channel near 5.61.
Source: Tradingview, Stone X
The longer the Russian/Ukraine continues, the more likely the possibility that the EU will end up sanctioning natural gas. Until then, the demand is high, as EU has already banned coal.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Contracts for Difference (CFDs) are not available to US residents.
FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.
Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.
© FOREX.COM 2025