Natural Gas Price Prediction – Gas Prices Hold Just Above Support

Despite the recent tumble in price natural gas inventories remain below the 5-year average range for this time of year. Warmer than normal weather is expected to cover most of the United States for the next 8-14 day which should put downward pressure on natural gas demand.
David Becker
Natural Gas Pipes

Natural gas prices edged lower on Thursday ahead of Friday’s inventory report from the Department of Energy. Expectations are that inventories will decline by 63 Bcf according to Estimize.

Technical Analysis

Natural gas prices eased lower but remained above support near an upward sloping trend line that comes in near 2.89. Resistance is seen near the 10-day moving average seen near 3.39. Negative momentum is decelerating as the fast stochastic generated a crossover sell signal in oversold territory. The current reading on the fast stochastic is 4, well below the oversold trigger level of 20 which could foreshadow a correction.

LNG Exports Declined

U.S. LNG exports decline week over week. Seven LNG vessels with a combined LNG-carrying capacity of 24.7 Bcf departed the United States from December 13 to December 19, and one vessel was loading at Sabine Pass on Wednesday, according to Bloomberg shipping data. On Tuesday, Cheniere Energy, the developer of the Sabine Pass liquefaction facility in Louisiana, announced it will sell LNG from Train 6 to Malaysia’s Petronas in a 20-year deal. Train 6 has been approved but is not yet under construction. U.S. LNG imports into Cove Point will continue later this month. One LNG cargo is scheduled to be delivered to Cove Point in Maryland later this month, according to Bloomberg shipping data. The cargo was loaded at the Bonny terminal in Nigeria and is en route to Maryland, according to Bloomberg.

Net Withdrawals Drop

Net withdrawals from working gas storage are lower than the five-year average for the second week in a row. Net withdrawals from storage totaled 141 Bcf for the week ending December 14, compared with the five-year average net withdrawals of 144 Bcf and last year’s net withdrawals of 166 Bcf during the same week. Working gas stocks totaled 2,773 Bcf, which is 720 Bcf lower than the five-year average and 697 Bcf lower than last year at this time.

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