The price of natural gas declined after recovering from a one-month low the day before. Hopes for increased energy demand and prior geopolitical concerns caused XNG/USD to increase. President Xi of China’s inability to confirm more gas pipelines from Russia to query customers is now accompanied by pre-Fed worry.

For detailed directions, risk catalysts and EIA inventories will be crucial. Ahead of Wednesday’s crucial Fed monetary policy meeting, natural gas (XNG/USD) prices struggle to maintain the day’s recovery from the monthly low. Recent news from China and the cautious atmosphere ahead of Thursday’s official Weekly Natural Gas Storage Change report from the US Energy Information Administration may further challenge the XNG/USD pricing (EIA). Yet, the energy source is still only moderately provided for $2.44 as of the time of the press.

The market had hoped to overcome the financial fallouts to support the XNG/USD purchasers the day before when it was announced that Russia would build new pipelines to carry additional natural gas to China. The Chinese president, Xi Jinping, later pushed the gas purchasers back after declining to approve the arrangement.

Before the most recent decline, the price of natural gas was supported by Japan’s two trillion Yen stimulus program, which provided energy subsidies to families to reduce the burden of inflation on the country’s population.

It should be mentioned that even while the US Dollar loses some of the previous day’s gains from its recovery from a five-week low, the recent mixed US data and the market’s hawkish expectations of seeing a 0.25% rate rise from the US Federal Reserve weighed on the commodities price.

Also, Bloomberg’s report that Italy is putting up new LNG terminals to combat the energy crisis caused by Russia and the expectation of a mild winter in Europe is a problem for XNG/USD purchasers.

The price of natural gas might increase if today’s Fed decision weakens the US dollar and the previous -58B weekly EIA inventories are significantly reduced.

Technical Analysis

Even if the oversold RSI (14) joins many levels at $2.35–30 to test the Natural Gas bearish, the 10-DMA barrier surrounding $2.53 still presents a problem for XNG/USD purchasers.