Natural Gas Price Prediction – Prices Rebound on Strong Export Demand

Natural gas prices rallied on Monday, rising 2% and recapturing the losses seen last Friday. Prices are chopping in a relatively tight range as declining inventories continue to be influenced by stronger US export demand. The weather is expected to be warmer than normal over the next 6-10 and 8-14 days according to the latest forecast from the National Oceanic Atmospheric Administration.

Technical analysis

Natural gas prices rebounded on Monday recapturing resistance which is now short-term support near the 10-day moving average at 2.83. Resistance is seen near the February highs at 2.90. Prices have been rangebound for nearly 3-weeks which has pushed historical volatility down to the 2019 lows. Momentum is neutral as the MACD (moving average convergence divergence) histogram is printing in the black with a flat trajectory which points to consolidation.

Export Demand Increases

The Department of Energy announced last week that LNG exports increased week over week. Traders continue to wait for a trade deal between the US and China which is likely to set off a surge in LNG exports. The EIA reported that Nine LNG vessels with a combined LNG-carrying capacity of 39.4 Bcf departed the United States from March 7 to March 13. Two vessels were loading at the Sabine Pass terminal on Wednesday. The developer of the Sabine Pass terminal in Louisiana announced the completion of the Sabine pass train number 5. The EIA reports that the first commercial delivery from Train 5 is expected in September 2019.

Storage declined more than expected according to the EIA’s reported last week. Despite the drop there has been little price pressure. Net withdrawals from storage totaled 204 Bcf for the week ending March 8, compared with the five-year average net withdrawals of 99 Bcf and last year’s net withdrawals of 88 Bcf during the same week. Expectations were for a 168 Bcf draw according to Estimize. Working gas stocks totaled 1,186 Bcf, which is 569 Bcf lower than the five-year average and 359 Bcf lower than last year at this time.