Natural Gas Prices Tumble Ahead of Inventory Report

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.

Technical Analysis

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.

LNG Exports are Expected to Rise

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.