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Natural gas prices fall ahead of the stock report

On Wednesday, natural gas prices tumbled ahead of Thursday's statement report from the Ministry of Energy. Expectations are for a pull of 173 Bcf in stocks, according to survey provider Estimize. According to a recent report by the National Oceanic Atmospheric Administration, much colder than normal weather is expected to cover most of the Midwest and Northeast, and warmer-than-average weather will cover most of the west coast in the next 8-14 days. EIA expects LNG exports to continue to increase in 2022 and 2023.

Technical Analysis

On Wednesday, natural gas prices fell by 5.7 per cent. Prices cut through the support, which is now resilient near the 200-day moving average of 4.07. Support is seen close to the December lows of 3.53. Short-term momentum is negative as the rapid stochastic generated a crossover sell signal. Medium-term momentum is positive but declining as the MACD (moving average convergence divergence) histogram is printed in positive territory with a declining trajectory indicating consolidation.

LNG exports are expected to increase

The Energy Information Administration predicts that U.S. liquefied natural gas exports averaged 9.8 billion cubic feet per day in 2021, compared to 6.5 Bcf / di by 2020. The EIA expects capacity increases in U.S. LNG exports to contribute to LNG exports on average 11.5 Bcf / di 2022 and 12.1 Bcf / di 2023.

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