Natural Gas Price Prediction – Prices Consolidate While LNG Exports Rise

Demand remains subdued
David Becker
Oil rig

Natural gas prices were little changed on Monday, as they hover just above short term support. LNG exports increased in the latest week, but demand remains relatively tame. There are no hurricanes expected in the Atlantic and the weather is expected to be relatively mild over the next two weeks with warmer than normal weather in the east and cooler than normal weather in the west.

Technical Analysis

Natural gas prices edged lower on Monday, and continue to hover just above support near the 10-day moving average at 2.37. Resistance is seen near the former breakdown level near 2.43. Medium term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing near the zero index line with a flat trajectory which reflects consolidation. The fast stochastic is also moving sideways and printing in a reading of 23, just above the oversold trigger level of 20.

LNG Exports Rise

The EIA reports that LNG exports increase week over week. Ten LNG vessels with a combined LNG-carrying capacity of 36.0 Bcf departed the United States between June 6 and June 12, according to the EIA. One vessel was loading at the Sabine Pass terminal on Wednesday. Since the start of June, natural gas supplied to US liquefied natural gas export facilities averaged 5.3 billion cubic feet per day 6% lower than in May 2019, according to the EIA. In May 2019, natural gas feedstock deliveries to US LNG export terminals were at record-high levels, averaging 5.7 Bcf per day, 65% higher than the 2018 annual average. On average LNG exports are on the rise which is providing the backdrop to keep prices buoyed.

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