Natural Gas Price Prediction – Prices Whipsaw on Dorian and LNG Demand

Natural gas prices moved lower on Tuesday sliding 1.7% as traders started to price in a northeastern movement for tropical storm Dorian. The storm is expected to move over the Caribbean and eventual hit the east coast of the United States. If the storm were to track into the Gulf of Mexico, it could have damaging effects on the US natural gas infrastructure. Tropical Depression Six is hovering in the southern part of US east coast and the movement of the storm has it meeting up and combination with Tropical Storm Dorian. Six could push Dorian and potentially guiding the storm into the Gulf of Mexico.

Technical Analysis

Natural gas prices continued to whipsaw as Tropical storm Dorian gyrates. Resistance is seen near the mid-August highs 2.26. Support is seen near the 10-day moving average at 2.19. Short term momentum is neutral fast stochastic continues to generate alternating buy and sell signal. The fast stochastic has been whipsawing frequently which is a sign of choppy trade. Medium-term momentum positive to neutral as the MACD (moving average convergence divergence) histogram printing in the black with a declining trajectory which points to consolidation.

LNG Demand is Weighing on Prices

A report in the Wall Street Journal on Tuesday describe the glut of natural gas that has been created by the US shale boom. More shale gas than ever is being exported by the US in the form of LNG. Lower prices globally are actually hurting US producers. Natural-gas prices in Europe and Asia have plummeted this year to historic lows which come in conjunction with reduced demand, the trade dispute with China and brimming storage facilities in Europe. The biggest driver of falling prices, though, has been the US gas that is spilling into global markets.