• Natural Gas prints mild gains at three-week low after declining in the last five consecutive days.
• US Dollar’s retreat struggles to defend XNG/USD traders amid mostly downbeat energy market news.
• US House voting on debt-ceiling bill, employment clues and weekly Natural Gas inventories eyed for immediate directions.

Natural Gas (XNG/USD) picks up bids to recover from the lowest levels in three weeks, up 0.60% intraday near $2.29 amid the mid-Asian session on Thursday. In doing so, the energy instrument cheers the latest retreat in the US Dollar Index (DXY) amid receding hawkish Fed bets and hopes of avoiding the US default. However, the price-negative headlines from the XNG/USD market seem to keep the bears hopeful ahead of the key US data and weekly Natural Gas stockpile from the US Energy Information Administration (EIA).

US Dollar Index (DXY) grinds near 104.22 after retreating from the highest levels since the mid-March late on Wednesday. That said, the greenback’s latest pullback could be linked to the optimism surrounding US debt-ceiling deal as it is being discussed in the US House of Representatives. Also exerting downside pressure on the DXY could be the latest shift in the Federal Reserve (Fed) concerns amid mixed US data and mostly downbeat comments from the Fed officials suggesting a pause in the rate hike.

Even so, concerns that the Natural Gas flaring will outline pipeline capacity, per Reuters, also exert downside pressure on the XNG/USD price. “East Daley and Validere, a measurement, reporting, and verification firm, estimated pipeline takeaway capacity will fall short of gas production by an average of 200 million cubic feet per day (mmcfd) in 2023 and the first half of 2024, before rising to about 500 mmcfd in May 2024,” said the news late in May.

It’s worth noting that the hopes of reduction in the European gas demand and recent downbeat China data also weigh on the Natural Gas Price. Late in the last week, Reuters came out with a news citing a document seen that suggests  European Union gas demand could fall in the coming 12 months by more than the total volume of gas the EU expects to buy from Russia this year.

Amid these plays, the XNG/USD price remains sidelined as traders await the key risk catalysts, as well as the weekly Natural Gas Storage Change, prior 96B, for clear directions. Apart from that, the early signals for Friday’s US Nonfarm Payrolls (NFP), namely the ADP Employment Change, ISM Manufacturing PMI and S&P Global PMIs for May, will be crucial to watch for fresh impulse.