Natural gas futures witnessed a significant decline during the European session on Tuesday, which was reflected in the overall market movements. According to data from the New York Mercantile Exchange, natural gas futures for February were trading at $3.77 per million British thermal units, which represents a decrease of 4.32% compared to previous trading.
Natural gas futures decline
These declines in natural gas futures are the result of several economic and market factors, as the market witnessed significant fluctuations in recent days. Prices fell to their lowest levels, as contracts recorded $3.75 per million British thermal units earlier in the session, reflecting growing concerns about supply and demand in energy markets.
Natural gas is one of the most prominent commodities affected by global market fluctuations. This decline in prices reflects a state of tension in energy markets due to factors such as increased gas production in some major countries, in addition to economic fluctuations that affect demand in certain seasons of the year.
Natural Gas Support and Resistance Levels
Analysts indicate that natural gas futures may find support levels at $3,370, while resistance levels are at $4,201. These levels are considered critical points in determining the direction of the market in the coming days. Traders rely on price action around these points in their decisions to determine future expectations for the natural gas market.
The US Dollar Index Decline
In the same context, the US Dollar Index, which measures the performance of the US currency against a basket of six other major currencies, witnessed a decline of 0.18%. The index was traded at 107.74 points. This decline in the value of the dollar reflects global trends towards other markets in search of alternative investments with the decline in the purchasing power of the dollar.
The rise in crude oil prices
The decline in the US dollar also affects the prices of commodities traded in US dollars, such as natural gas and oil. The decline in the dollar usually increases demand for commodities denominated in dollars, as they are less expensive for foreign investors.
On another note, crude oil prices for February increased by 0.58%, trading at $71.40 per barrel. This increase comes at a time when global markets are witnessing increased interest in energy prices amid the continued impact of geopolitical and economic tensions on energy supplies.
Heating oil prices for March also increased by 1.18% to $2.31 per gallon. These increases in oil and heating oil prices are one of the indicators of increased demand in energy markets, especially in countries that rely on oil to heat homes.
The impact of changes in gas and oil prices on the global economy
Changes in natural gas and oil prices have a significant impact on the global economy. Higher prices can lead to increased production costs in energy-dependent industries. This can increase the cost of goods and services and put pressure on the budgets of individuals and governments alike.
In contrast, lower gas and oil prices may encourage increased consumption in some markets, but may cause a decline in investment in the energy industry, especially in the exploration and extraction sector. This leads to significant volatility in currency and financial markets that are affected by global commodity prices.
Market developments in the near future
Experts expect price volatility to continue in the coming period due to a set of intertwined factors, including continued geopolitical tensions and increased global demand for energy, especially in the winter. The natural gas market will remain under pressure until global markets achieve some balance.
Global markets and commodity price indices
Global commodity markets react rapidly to price changes, especially in gas and oil markets. Investors in energy markets pay special attention to geopolitical factors. Natural gas prices will likely remain influenced by factors that cause continued volatility.
. As economic growth continues to slow in some countries, market may experience some declines, making it necessary to closely monitor economic movements.
The impact of volatility on economic policies
The continued volatility in gas and oil markets requires close monitoring by governments and economic decision-makers. Given that natural gas and oil are two of the world’s primary sources of energy, significant changes in their prices can impact economic policies in many countries.
Some countries will likely adjust their economic policies to keep pace with changes in energy markets. Some governments will work to enhance renewable energy expansion strategies to reduce reliance on fossil fuels, which may enhance the stability of energy markets in the long term.
Regional and local markets
At the regional and local levels, natural gas price changes affect both global and local markets.
. Especially in countries that rely heavily on gas and oil imports, such as some Middle Eastern countries. These countries may experience price fluctuations that affect their national budgets.
In markets such as the US market, which is one of largest gas and oil markets in the world, price changes directly affect major companies operating in this sector. This affects stock markets, especially in energy-related sectors.
Economic and geopolitical factors significantly impact gas and oil markets, causing frequent price fluctuations. Natural gas futures continue to decline, and oil prices show movement, reflecting caution in global markets.
