Natural Gas hits rock bottom and enters an area not seen since August 2020.

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• Natural Gas hits rock bottom and enters an area not seen since August 2020.
• Traders are following the ongoing probe by the House into Biden’s LNG export ban.
• The US Dollar Index steadies at 104 and is supported with some risk-off tone after ceasefire talks hit a dead end in the Middle East.

Natural Gas (XNG/USD) is trading sub-$2, and flirting with lower levels, not seen since August 2020. The move comes with all eyes on Capitol Hill where a probe by the House Committee is ongoing on US President Joe Biden’s halt on any developments of new LNG export terminals. The administration had said it would not issue approvals on new studies and plans earlier than after one year. The probe will be heading into its second day this Thursday with a hearing on the issue with Deputy Secretary of Energy David Turk.

The US Dollar (USD), which is negatively correlated to Natural Gas, is steady after some profit taking from its earlier peak performance on Monday and past Friday. The geopolitical element helps the Greenback a bit with Israel Prime Minister Benjamin Netanyahu rejecting the recent ceasefire proposal from Hamas and rather committing to fully infiltrating the Gaza region and liquidating Hamas. The breakdown of the ceasefire talks is triggering some risk off and is providing support for the Greenback.

Natural Gas is trading at $1.99 per MMBtu at the time of writing.

Natural Gas is facing a more substantial downturn and could be on its way to hit pre-Covid lows. Although the ceasefire plans are off the table now in the Middle East, markets have gotten time to grow accustomed to the tensions, and since the tensions escalated, Gas transit has not been distorted whatsoever. Overall, with spring coming closer, it does not look like Gas will be able to sprint substantially higher anytime soon under these conditions.

On the upside, Natural Gas is facing some pivotal technical levels to get back to. First, the low of January at $2.10 needs to be reclaimed again. Next is the intermediary level near $2.48. Once that area gets hit, expect to see a test near $2.57 at the purple line.

Once the current low at $2.04 gets tested, or broken again, expect the $2.00 big figure to crack under pressure as well. The first level to look for on the downside is near $1.95 (orange level) which goes back to August 2020. Next is the red line near $1.51, the low of June 2020.

XNG/USD (Daily Chart)

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