Expectations are for a 173 Bcf draw in natural gas stockpiles
On Wednesday, natural gas prices tumbled ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 173 Bcf draw in stockpiles, according to survey provider Estimize. According to a recent National Oceanic Atmospheric Administration report, much colder than normal weather is expected to cover most of the Mid-West and North East, and warmer than average weather will cover most of the West Coast for the next 8-14 days. The EIA expects LNG exports will continue to rise in 2022 and 2023.
On Wednesday, natural gas prices tumbled 5.7%. Prices sliced through support which is now resistant near the 200-day moving average at 4.07. Support is seen near the December lows at 3.53. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive but decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation.
The Energy Information Administration forecasts that U.S. liquefied natural gas exports averaged 9.8 billion cubic feet per day in 2021, compared with 6.5 Bcf/d in 2020. The EIA expect U.S. LNG export capacity increases will contribute to LNG exports averaging 11.5 Bcf/d in 2022 and 12.1 Bcf/d in 2023.
David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.