Natural Gas Falls Despite Rising Tensions Over Israel's Deadly Rafah Attack

• Natural Gas prices fall almost 2% amid reports that Israeli opposition parties discuss plans to impeach Prime Minister Benjamin Netanyahu.
• Ireland, Norway and Spain have officially recognized the Palestinian state as attacks on Rafah continue.
• The US Dollar Index retreats further, testing the last lines of defense.

The price of Natural Gas (XNG/USD) is testing this week's low on Tuesday after prices fell on Monday due to extensive profit taking. Tuesday's drop comes in the wake of headlines indicating that the opposition in Israel plans to meet on Wednesday to seek ways to remove Prime Minister Benjamin Netanyahu. Tensions are rising in Israel after several nations around the world expressed concern following the attack on a refugee camp in Rafah, which killed at least 45 people.

Meanwhile, the US Dollar Index (DXY) eases further on Tuesday ahead of the official start of the week for US markets following a Memorial Day bank holiday on Monday. The pullback comes after warnings from Japanese Finance Minister Shun'ichi Suzuki, who opposed any attempt to further devalue the Japanese Yen saying that all measures are at his disposal to ensure a stable exchange rate. The US economic agenda is set to begin with a series of data and four members of the US Federal Reserve (Fed).

Natural Gas is trading at $2.77 per MMBtu at the time of writing this article.

News and drivers of the Natural Gas market: Tension and pressure on the US increases

• On Tuesday morning, witnesses told Reuters that tanks have reached the outskirts of the city of Rafah.
• Israeli opposition leader Yair Lapid, Yisrael Beytenu president Avigdor Liberman and New Hope president Gideon Sa'ar will meet on Wednesday to discuss the creation of an alternative government and the removal of Israeli Prime Minister Benjamin Netanyahu from office , KAN reports citing sources.
• The Axios news agency reported that the US is still evaluating whether Israel violated a red line with the Rafah attacks.
• Bloomberg Power and Gas research estimated that despite current supply issues, the European bloc is still on track to reach 100% gas storage inventory ahead of the winter season.

Natural Gas Technical Analysis: US trapped in its support for Israel

Natural Gas is falling with rumors of a possible opposition coalition formation that could take power from current Prime Minister Benjamin Netanyahu, an event that could de-escalate the situation in the region. After the Rafah massacre over the weekend, international disapproval is growing and even the US is seeing its arguments for supporting Israel beginning to wear thin. If a new coalition were to take control of the government, the current offensive in Gaza could end and be withdrawn, easing tensions in the region.

$3.00 was a level it easily surpassed on Wednesday. $3.07 (March 6, 2023 high) remains key as prices failed to close above it. Further up, the new year-to-date high at $3.16 is the level to beat.

On the downside, the 200-day SMA is acting as first support near $2.53. If that support area does not hold, then the crucial level near $2.14 should do the trick before $2.11, where both the 55-day and 100-day SMA meet.

Natural Gas: Daily Chart