Key Insights
- Natural gas prices moved lower but settled off the lows.
- Prices formed a Doji Day.
- The weather is expected to be hotter than normal in the West and South.
On Tuesday, natural gas prices declined but finished off the session lows forming a Doji Day which is a sign of indecision. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal throughout most of the West South East next 6-10 and 8-14 days.
Gas arriving at LNG terminals have declined because of a fire at Freeport LNG‘s natural gas liquefaction plant in South Texas on June 8, 2022. The fire has led to the full shutdown of the facility. The shutdown of the Freeport LNG facility, located south of Houston on the Gulf Coast, will reduce total U.S. liquefied natural gas (LNG) export capacity by approximately 2 billion BCF per day.
Technical Analysis
Natural gas prices formed a Doji day which is a sign of indecision. Support is seen near a horizontal trend line that comes in at 6.73.
Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are oversold as the fast stochastic is printing a reading of 9, below the oversold trigger level of 20.
Medium-term momentum has turned negative as the MACD (moving average convergence divergence) generated a crossover sell signal. This scenario 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 prints in negative territory with a falling trajectory which points to lower prices.
