Natural Gas Price Prediction – Natural Gas Prices Rebound as LNG Exports Rise

Natural gas prices moved higher on Monday, rebounding for a second straight trading session. Prices have traded under pressure do to the rising trajectory of inventory levels, which have been driving by strong production. The warmer than normal weather that plagued China during the winter, reduced Asian natural gas demand and weighed on US exports of LNG. With production likely to continue to rise, due to the rising production of US oil, prices will likely remain under pressure unless the hurricane season is active.

Technical Analysis

Natural gas prices moved higher on Monday, rising nearly 1%, and are poised to test restistance near the 10-day moving average at 2.44. Support is seen near the June lows at 2.3. Target support is now seen near the 2016 lows at 1.91. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. The current reading on the fast stochastic is 15, below the oversold trigger level of 20 which could foreshadow a correction. Medium momentum has turned neutral as the MACD (moving average convergence divergence) histogram is printing in the red with a slightly rising trajectory which points to consolidation.

US exports of liquefied natural gas to Europe have increased substantially since October 2018, averaging 1.9 billion cubic feet per day in the winter of 2018–19 compared with 0.1 Bcf per day in the winter of 2017–18, according to the EUA. The Department of Energy reports that US LNG exports to Europe increased primarily as a result of tepid LNG demand in Asia because of warm winter, declining price differentials between European and Asian spot natural gas prices, and additional US  LNG supply that came online in the fourth quarter of 2018, increasing available global spot LNG supply. The EIA
revealed that in March and April 2019,US LNG exports to Europe averaged 1.7 Bcf per day, ten times higher than in the same months of last year, and accounted for more than one-third of all US LNG exports in those months.