Natural Gas Price Analysis for February 21, 2018

Natural gas prices whipsawed initially attempting to move higher, but unable to push through resistance levels. While demand was down in the latest weak which weighed on natural gas prices, colder than normal weather is moving east, which will drive up natural gas demand. Supply of natural gas is flat, and LNG exports eased in the latest week.

Technicals

Natural gas prices attempted to move higher but ran into resistance near the 10-day moving average at 2.618.  Support is seen near the February lows at 2.53. Negative momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in the red with a flat trajectory which reflects consolidation. The relative strength index (RSI) is moving sideways printing just above the oversold trigger level of 30, which also reflects consolidation in natural gas prices.

Supply remains flat

According to data from the EIA, the average total supply of natural gas remained the same as in the previous report week, averaging 83.9 Bcf per day. Dry natural gas production remained constant week over week. Average net imports from Canada decreased by 4% from last week but were a small contributor to the overall supply.

Demand falls

Total U.S. consumption of natural gas fell by 7% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 2% week over week. Industrial sector consumption decreased by 2% week over week. In the residential and commercial sectors, consumption declined by 14%. Natural gas exports to Mexico decreased 1%.

U.S. liquefied natural gas (LNG) exports decrease week over week

U.S. liquefied natural gas (LNG) exports decrease week over week. Five LNG vessels (LNG-carrying capacity 17.2 Bcf combined) departed the Sabine Pass liquefaction facility from February 7 to February 14. One tanker (LNG-carrying capacity 3.8 Bcf) was loading at the terminal on Wednesday.