Natural Gas Surges Higher on War Concerns

Key Insights

• Natural Gas prices hit a fresh 13-year high.
• Natural gas arrivals at LNG terminals rebounded.
• Further potential conflict in Eastern Ukraine lifted gas prices.

Natural gas prices hit a 13-year and closed near the day’s highs. Demand remains strong, and natural gas arrivals at LNG terminals rebounded. The rally in natural gas prices comes ahead of Thursday’s inventory report from the Department of Energy. According to the survey provider, Esimize expectations are for a 30 Bcf build in stockpiles.

The weather is expected to be much colder than average in the mid-West over the next 6-10 days and moderating over the next 8-14 days, but still colder than average.

Technical Analysis

Natural gas prices hit a fresh 13-year and closed at the highs foreshadowing higher prices. Target resistance is seen near the July 2008 highs at 13.68. Support is seen near the 10-day moving average at 6.20.

Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought. The fast stochastic is printing a reading of 98, above the overbought trigger level of 80. Additionally, the RSI is printing a reading of 81, above the overbought trigger level of 70.

Medium-term momentum has turned positive. The MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to an acceleration in the underlying price of natural gas.