Natural Gas Prices Whipsaw and Rise Slightly on Geopolitical Rhetoric

Natural gas prices whipsawed on Tuesday. In the premarket prices were up 9% but were unable to hold on to gains. The weather is expected to be colder than normal in the mid-West and West Coast for the next 2-week. The colder air should increase natural gas demand. LNG exports rose year over year in January rising 8%.

Technical Analysis

Natural gas prices moved whipsawed and moved higher but were well off the highs of the day. Support near the 10-day moving average at 4.27. Resistance is seen near the February highs at 4.86. The 10-day moving average crossed below the 50-day moving average which means that a short-term down trend is now in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is poised to turn positive as the MACD (moving average convergence divergence) index generated a crossover buy 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 EIA forecast that U.S. LNG exports averaged 11.2 billion cubic feet per day in January 2022, up 8%, supported by large price differences between the Henry Hub price in the United States and spot prices in Europe and Asia. In particular, inventories in Europe remain much lower than their five-year averages and are contributing to strong demand for LNG imports. The EIA expects high levels of U.S. LNG exports to continue into 2022, averaging 11.3 Bcf per day for the year, a 16% increase from 2021.