Natural Gas News: Surprise Technical Bounce as LNG Export Concerns Ease

Surprise Rebound

August natural gas futures rose in early trading Monday as weather forecasts indicated hotter temperatures and U.S. LNG exports were projected to recover swiftly following a dip due to Hurricane Beryl.

At 14:17 GMT, Natural Gas Futures are trading $2.352, up $0.033 or +1.42%. That’s up from an intraday low of $2.268,

Weather Forecasts Turn Hotter

Coming off eight consecutive lower sessions, the August Nymex contract reversed its early session weakness, potentially setting up for a bullish closing price reversal bottom. Weather forecasts from NatGasWeather predicted that high pressure would dominate much of the western, southern, and eastern U.S. from July 8-14. These regions can expect highs ranging from the upper 80s to 110s. California will experience dangerous heat, with temperatures between 100-118°F, while the Pacific Northwest will see highs in the 90s-100s. The Midwest and central U.S. are expected to remain cooler, with highs in the 70s to lower 80s due to a weather system moving through.

Impact of Hurricane Beryl

Hurricane Beryl made landfall near Matagorda, TX, around 08:00 GMT as a Category 1 storm, bringing 80 mph winds and heavy rains to the Texas coast towards Houston. The storm caused a significant dip in LNG exports, dropping near 11.4 Bcf for Monday. The National Hurricane Center (NHC) issued a storm surge warning from Mesquite Bay to Sabine Pass, while the storm is expected to move northeast, affecting demand due to cooler temperatures and power outages.

U.S. LNG Exports and Production

Despite the temporary drop in LNG exports due to Hurricane Beryl, they are expected to bounce back quickly. The U.S. production levels are slightly down compared to last week, contributing to the market’s anticipation of a swift recovery. Beryl’s remnants are projected to bring showers and slightly cooler temperatures to the Ohio Valley and East by mid-week, which could momentarily reduce demand.

Market Forecast

Given the forecasted rebound in LNG exports and the continued hot weather in key regions, the natural gas market shows a less-bearish outlook. The recovery from Hurricane Beryl’s impact, coupled with high temperatures driving demand, suggests that natural gas futures may slow the pace of the recent selling and actually rise in the short term. Traders should monitor weather developments and LNG export data closely, as these factors will likely influence market movements in the coming days and could fuel the start of a short-covering rally.

Technical Analysis

Natural gas futures are in a positon to post a dramatic closing price reversal bottom. If confirmed, the chart pattern won’t change the trend to up, but it could trigger the start of a substantial short-covering rally.

On the downside, support is the April 26 bottom at $2.251. Resistance is the 50% level at $2.652, followed by the 50-day moving average at $2.734.