A bearish engulfing candle on the 2-hour chart suggests strong bearish momentum, with immediate support at $2.58. A downward break could see prices test $2.54 and $2.49.

Impact of Middle East peace talks and US power surge

Prices fell on possible peace talks in the Middle East, which could ease geopolitical tensions and ease supply fears. However, the decline could be short-lived as U.S. power producers continue to expand natural gas production.

As of June, natural gas now accounts for 46% of total U.S. electricity generation, driving demand to record highs despite climate goals to curb fossil fuel consumption.

Increase in natural gas production in the United States and its impact on prices

The United States remains the main driver of global natural gas consumption. In the first nine months of 2024, gas generation reached 55.6 million megawatt hours, an increase of 5% compared to 2023.

The country now accounts for 30% of the world’s gas-fired electricity, reflecting increased demand from energy suppliers. Despite ambitions to reduce dependence on fossil fuels by 2030, power producers show no signs of curbing gas consumption.

Impact of Hurricane Milton on Natural Gas Demand

Hurricane Milton, expected to make landfall late Wednesday or early Thursday as a Category 4 storm, poses a serious threat to Florida with strong winds, heavy rains and dangerous storm surges. The storm’s path through the Gulf of Mexico has already seen the Natural gas production is disrupted, and further declines in demand are expected due to possible power outages and cooler temperatures in affected regions.