Natural Gas Gaps Higher on Stronger European Demand

Natural gas prices rebounded sharply, increasing nearly 5% as concern over natural gas in Europe buoyed the U.S.  Markets. Prices should be capped by local demand as the weather is expected to be warmer than normal throughout most of the United States for the next 2-weeks. LNG exports are on the rise according to the EIA.

 Technical Analysis

Natural gas prices gapped, recapturing resistance which is now supported near the 50-day moving average at 4.07. Resistance is seen near the 200-day moving average at 4.22. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold. The fast stochastic is printing a reading of 15, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell 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.

 LNG is on the Rise

U.S. LNG exports are up by five vessels this week from last week. According to the Energy Information Administration, twenty-seven LNG vessels with a combined LNG-carrying capacity of 101 Bcf departed the United States between February 3 and February 9, 2022.