Natural Gas Price Prediction – Prices Rise in Sympathy with Oil as LNG Exports Decline

Natural gas prices surged higher, breaking out above trend line resistance, closing off the highs of the session but settling up 5.7%. This comes despite colder than normal weather throughout most of the east coast for the next 2-weeks which will reduce cooling demand. While May is generally still a shoulder month as it pertains to heating and cooling, there are times when humidity in the northeast drives early cooling demand. Hedge funds have squared their short-positive in futures and options. The rise in natural gas was partially in sympathy with oil prices which surged 20% on Tuesday. US exports of liquid natural gas (LNG) declined in the latest week.

Technical Analysis

Natural gas prices surged higher rallying 5.7% and breaking out above trend line resistance. Short term support is seen near the trend line breakout at 2.08. Target resistance is seen near the January 2020 highs at 2.28. The 10-day moving average recently crossed above the 50-day moving average which means that a short term uptrend is now in place. Short term momentum has turned positive as the fast stochastic recently generated a crossover buy signal.

The current reading on the fast stochastic is 86, above the overbought trigger level of 80 which could foreshadow a correction. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram also generated a crossover buy signal, sliding through the zero index level with an upward sloping trajectory which points to higher natural gas prices.

LNG Exports Decline

The Energy Information Administration n (EIA) reported that US LNG exports decrease week over week. Eleven LNG vessels with a combined LNG-carrying capacity of 39 Bcf departed the United States between April 23 and April 29, 2020, according to the EIA. One vessel was loading at the Freeport terminal on Wednesday.