Natural Gas Price Prediction – Prices Drop Through Support on Declining Demand

Natural gas prices are oversold
David Becker
Crude Oil

Natural gas prices broke down and are headed for lower levels. Demand has declined, due to the spring shoulder period, and will not likely receive a boost until June. LNG demand in the form of exports has continued to decline due to a warmer than normal winter in China. The weather is expected to be normal over the next 8-14 days. Traders await Thursday’s inventory report from the Energy Information Admininstration. Expectations are for a 71 Bcf increase in natural gas stockpiles according to Estimize.

Technical Analysis

Natural gas prices broke through trend line support near the February lows at 2.54. The first stop of support is the May contract lows at 2.48. After that prices could fall back to the 2016 lows at 1.65. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices and accelerating negative momentum. The fast stochastic also generated a crossover sell signal, which points to accelerating negative moemtnum. The current reading on the fast stochastic is 1, which is below the oversold trigger level of 20, and could foreshadow a correction.

LNG Exports Decline Putting Pressure on Natural Gas Prices

US liquefied natural gas exports decrease week over week. Five LNG vessels with a combined LNG-carrying capacity of 17.8 Bcf departed the United States from April 4 to April 10, according to the EIA. One vessel was loading at the Sabine Pass terminal on Wednesday. On April 9, the Federal Energy Regulatory Commission authorized Cameron LNG to introduce hazardous fluids to commission Train 1. Train 1 is expected to enter service in the second quarter of 2019.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US