Natural Gas Price Prediction – Prices Rebound and Form Bull Flag Pattern

David Becker
Updated

Natural gas price moved higher on Friday, following Thursday’s drop in the wake of the EIA estimate of stockpiles. Demand in the US fell in the latest week by LNG exports continue to rise. China has now become the largest importer of natural gas, and a trade agreement would go a long way toward increasing US exports.

Technical Analysis

Natural gas prices moved higher on Friday, making a higher low and a higher high. Prices appear to be forming a bull flag pattern which his a pause that refreshes higher. Prices recaptured short term support which is the 10-day moving average near 4.46. Additional support is seen near an upward sloping trend line which comes in near 4.27. Resistance is seen near a downward sloping trend line that come in near 4.71. Short-term momentum has turned positive as fast stochastic generated a crossover buy signal.

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Domestic Demand Dipped

Total U.S. consumption of natural gas fell by 1% compared with the previous report week, according to the EIA. Natural gas consumed for power generation climbed by 2% week over week. Industrial sector consumption decreased by 1% week over week. In the residential and commercial sectors, consumption declined by 4%. Despite the cold front that moved through the country this week, the previous report week was also cold and actually had more population-weighted heating degree days. Natural gas exports to Mexico decreased 1%.

LNG Exports Rose

The EIA reports that LNG exports increase week over week. Eight LNG vessels with a combined LNG-carrying capacity of 27.9 Bcf departed the United States from November 29 to December 5, according to the EIA. A tanker waiting to load the first LNG produced from the new Corpus Christi liquefaction terminal in Texas has been berthed at the terminal since December 5, according to the EIA. U.S. LNG exports in November set a new record with 31 loaded cargoes exceeding the previous record set in July with 29 exported cargoes.

This article was originally posted on FX Empire

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