Natural Gas Price Analysis for March 20, 2018
Natural gas prices move lower on Monday declining more than 1.25%, despite colder than normal weather which is forecast to cover most of the United States over the next 8-14 days. Colder than normal weather will increase heating demand late in the drawing season, helping to buoy natural gas prices. Canadian imports are increasing supplies, but the U.S. exported more natural gas than it imported in 2017.
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Technicals
Natural gas prices bounced at trend line support near 2.64. A break of this level would lead to a test of the February low at 2.53. Resistance is seen near the 10-day moving average at 2.73. Momentum is turning negative as the MACD index is poised to generate a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD signal line).
Canadian imports drive supply increases
Canadian imports drive supply increases. According to data from the EIA, the average total supply of natural gas rose by 1% compared with the previous report week. Dry natural gas production remained constant week over week. Average net imports from Canada increased by 13% from last week.
Consumption in end-use demand sectors increases. With colder temperatures in many parts of the Lower 48 states, total U.S. consumption of natural gas rose by 5% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 4% week over week. Industrial sector consumption increased by 2% week over week. In the residential and commercial sectors where natural gas use for space heating is common, consumption increased by 9%. Natural gas exports to Mexico decreased 1%.
U.S. liquefied natural gas exports decrease week over week. Four vessels of LNG-carrying capacity 14.8 Bcf, departed the Sabine Pass liquefaction facility from March 8 to March 14. Two vessels combined LNG-carrying capacity 7.5 Bcf were loading at the terminal on Wednesday last week.