Natural Gas Prices Drop Sharply on Mild Weather Forecast

Natural gas dropped 7.5% on Monday after falling 6% on Friday. The weather is expected to be colder than normal in the South, and East Coast during the next 6-10 days. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal throughout the mid-West and West over the next 8-14 days. LNG exports were down in the latest week.

 Technical Analysis

On Friday, natural gas prices dropped testing support near an upward sloping trend line that comes in near 4.58. Additional support is seen near the 10-day moving average at 4.54. Resistance is seen near the December highs at 5.51. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive and decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation.

LNG Exports Decline

U.S. LNG exports are down by three vessels this week from last week. Twenty-two LNG vessels with a combined LNG-carrying capacity of 81 Bcf departed the United States between January 27 and February 2, 2022, according to shipping data provided by the EIA. In January, 103 tankers departed the United States, compared with 102 in December 2021. Vessel departures recorded for these two months were the highest to date.