Natural Gas Prices Jumped Amid EU Gas Deal with the US 

Key Insights

• Natural Gas prices continue to rally
• US-EU Gas Deal will Significantly Increase Supply of LNG to EU
• The weather is expected to remain cool

Natural gas prices rallied on Friday following the US and Eu joint task force to provide 15 billion cubic centimeters of LNG to Europe this year. The deal aims to reduce reliance on Russian energy exports. The weather forecast shows mixed weather across the West Coast and cooler than normal weather across the East Coast during the next 6-10 days. LNG exports were stable in the latest week.

Natural gas spot prices increased at most locations for the week of March 16th to March 23rd. The Henry Hub spot price rose from $4.67/MMBtu to $5.26/MMBtu.

Technical Analysis

On Friday, natural gas prices climbed higher, moving above former resistance, which is now supported near a downward sloping trend line near 5.35. Resistance is seen near the February highs at 5.57.

Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are overbought with the fast stochastic printing a reading of 89, above the overbought trigger level of 80. Medium-term momentum has turned positive. The MACD (moving average convergence divergence) index makes a crossover buy signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average, crosses above the 9-day moving average of the MACD line.