Natural Gas Forecast: US LNG Exports Decline as Heat and Maintenance Disrupt Supply

Highlights

• Mixed performance in natural gas futures due to weather and maintenance.
• 10% drop in US LNG exports attributed to maintenance and reduced European demand.
• Analysts anticipate increased LNG exports after maintenance concludes.

Overview

Natural gas futures are posting a mixed performance on Wednesday as traders assessed the impact of weather forecasts and ongoing maintenance on supply and demand dynamics. Scorching temperatures in certain US regions and cooler conditions in others led to varying levels of demand. However, planned maintenance at major suppliers and reduced European demand caused a 10% drop in US LNG exports in June.

The US faced intense heat in some areas, indicating strong demand for natural gas. Despite this, the overall market sentiment remained bearish due to a significant surplus of +358 Bcf. Natural gas prices declined on Monday, but the exact reasons were unclear. Despite the surplus, LNG prices showed strength, resulting in a market with both bullish and bearish elements.

Preliminary data showed a 10% decrease in US LNG exports in June, attributed to planned maintenance at key LNG plants and reduced European demand. Gas supplies to US plants were lower in the final week of June due to scheduled maintenance. Despite setbacks, June’s LNG exports surpassed the levels of the same month last year.

While Europe experienced a decline in LNG imports, US LNG exports to the region accounted for 47% of the total in June. Asia’s share increased, and Latin America also received a higher percentage. Analysts anticipate an increase in LNG exports this quarter as maintenance concludes.

In conclusion, natural gas futures displayed a mixed performance due to weather forecasts and ongoing maintenance. Planned maintenance and reduced European demand caused a decline in US LNG exports. Nonetheless, the market expects an increase in exports as maintenance work concludes.

Technical Analysis

Based on the provided technical indicators for Natural Gas, the current 4-hour price of 2.765 is slightly lower than the previous 4-hour close of 2.810, indicating a modest downward movement. The price is above both the 200-4H moving average of 2.476 and the 50-4H moving average of 2.725, suggesting a relatively bullish sentiment. The 14-4H RSI reading of 51.74 indicates a neutral sentiment, neither oversold nor overbought.

The main support area ranges from 2.681 to 2.717, with the price currently above this level. However, it has not yet reached the main resistance area at 2.998. Overall, the market sentiment for Natural Gas appears slightly bullish, but it’s important to monitor price movements and support/resistance levels for a more comprehensive analysis.