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David Becker

 

Natural gas prices moved higher on Wednesday as tropical cyclone number 9, heads toward the Caribbean. The trajectory of the storm is pointing to landfall in the United States, with a target of the west coast of Florida. A shift to the west would put the storm on course to head toward natural gas installation which could generate a supply disruption. Traders now await the Energy Departments inventory report scheduled for Thursday. Expectations are for a 24 Bcf build according to survey provider Estimize. KNG exports increased week over week, reflecting an increase in demand.

Technical Analysis

Natural gas prices surged on Wednesday, rising nearly 2% as the August contract expired. The September contract ran into resistance near a downward sloping trend line that comes in near 1.90. A break of that would lead to a test of the July highs near $2. Support is seen near the 50-day moving average at 1.85 which was former resistance. Momentum remains positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

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US LNG Exports Rise

US LNG exports increase week over week. Seven LNG with a combined LNG-carrying capacity of 25 Bcf departed the United States between July 16 and July 22, 2020, according to shipping data provided by the EIA.

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