Prices Surge on Promise that U.S. will Supply LNG to Europe
Natural gas surged higher on concerns over energy supplies in Europe. This movement in price action comes ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 217 Bcf draw in stockpiles, according to survey provider Estimize. According to a recent National Oceanic Atmospheric Administration report, warmer than normal weather is expected to cover most of the West and planes, and warmer than average weather will cover most of the mid-West for the next 6-10 days Prices are buoyed by strong demand on Europe.
Technical Analysis
On Wednesday, natural gas prices rallied pushing above resistance. Support is seen near the 10-day moving average at 4.18. Resistance is seen near the January highs at 4.87. Short-term momentum is positive as the fast stochastic generated a crossover buy 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 U.S. Promises Energy to Europe
The White House has promised that it will supply LNG to Europe. This winter, its allies will not freeze if Russia cuts off its natural gas or crude oil exports as retaliation for economic sanctions promised by the U.S. and its allies if Moscow invades Ukraine.
This article was originally posted on FX Empire
