Despite the wild price swings in the upward direction with hot weather support, natural gas traders were looking suspicious about the strength of the move above $8.4 during the last few hours before the weekly closing.
The price faces stiff resistance above $8.310 as the changing geopolitical equations look in favor of the natural gas bears amid growing concern over the world food crisis due to a sharp surge in inflation worldwide.
On the other hand, the whole world, including the United States, Russia, and Ukraine, felt the need to set aside the Russia-Ukraine war as food comes before anything else.
On Friday, Russia and Ukraine signed a landmark deal to unblock grain exports from Black Sea ports and ease an international food crisis. A U.N. official said a separate pact, signed on Friday, would smooth Russian exports.
The United Nations welcomed U.S. and European Union clarifications that their sanctions would not apply to their shipment.
This deal was expected to be fully operational in a few weeks and would restore grain shipments from the three reopened ports to pre-war levels of 5 million tons a month.
Gas flows through Russia's Nord Stream 1 natural gas pipeline, which runs under the Baltic Sea to Germany, partially resumed after being shut for maintenance on Jul. 11.
This pipeline had been running on reduced volumes following a dispute sparked by Russia's invasion of Ukraine.
Technically speaking, in the weekly chart, the last weekly closing level is evident of the presence of the natural gas bears above $8.310 that could result in the gap-down opening on the first trading session of the upcoming week. A big gap-down could see some reversal from the lower levels, but a breakdown below $7.5 could change the current trend.
The wild price swings could continue, but the trend could turn bearish during the upcoming weeks as both the bears and bulls look suspicious about the price movements in a particular direction amid changing the geopolitical outlook to avert a global food crisis.
On Saturday, Russian missiles hit Ukraine's southern port of Odesa, the Ukrainian military said, threatening a deal signed just a day earlier to unblock grain exports from Black Sea ports and ease global food shortages caused by the war.
This strike showed Moscow could not be trusted to implement the deal. However, public broadcaster Suspilne quoted the Ukrainian military as saying the missiles had not caused significant damage, and the preparations continued to restart grain exports from Black Sea ports.
The natural gas futures could test the recent peak at $9.665 on the upper side. On the other hand, the bears could drag down the natural gas futures below $6.442 on the lower side as Europe and some Asian countries could turn towards African oil and gas to fulfill their demand.
Disclaimer: The author of this analysis does not have any position in Natural Gas futures. Readers are advised to take any position at their own risk, as Natural Gas is one of the most liquid commodities in the world.