Natural Gas Prices Slip But the Trend Remains Upward Sloping

Key Insights

• Natural Gas prices consolidated and moved lower
• The weather is expected to remain cool
• The U.S. exported a record high LNG in 2021

Natural gas prices consolidated and moved lower after hitting a fresh high early in the trading session. The weather is expected to be cooler than normal over the next 6-10 and 8-14 days, increasing heating demand over most East Coast.

The EIA reported that U.S. exports of liquefied natural gas set a record high in 2021, averaging 9.7 billion cubic feet per day. U.S. LNG exports increased by 50% from 2020. The increase in U.S. LNG exports was driven by increased demand in both Europe and Asia and by expanding U.S. liquefaction capacity.

Technical Analysis

On Monday, natural gas prices consolidated, moving lower,  but held support near a downward sloping trend line near 5.405. Resistance is seen near the February highs at 5.57.

Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are overbought with the fast stochastic printing a reading of 88, above the overbought trigger level of 80. Medium-term momentum has turned positive. The MACD (moving average convergence divergence) index makes a crossover buy signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average, crosses above the 9-day moving average of the MACD line.