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Natural Gas Production Increases, but Prices Are Excessively High

Larissa Barlow

Apr 19, 2022 09:34

Natural gas prices have increased significantly. Deliveries of natural gas to LNG export facilities continued to increase. European sanctions against Russia increase the attractiveness of US gas.

 

Natural gas prices surged above $8 per MMBtu on Monday, capturing the attention of business channels. Prices of natural gas hit a 13-year high and closed near the day's highs. LNG demand continues to be high, as natural gas arrivals at LNG terminals increased to 12.74 billion cubic feet per day.

 

According to the National Oceanic and Atmospheric Administration, the weather on the East Coast is forecast to be warmer than typical. The temperature will then begin to fall over the next 8-14 days.

Technical Evaluation

Prices of natural gas jumped beyond $8 and were up 10% intraday, reaching a 13-year high. Prices increased by roughly 16% last week. Near the July 2008 highs of 13.68, the target resistance is visible. At 6.37, support is located near the 10-day moving average. The entire curve through 2022 is presently approaching $8 per MMBtu.

 

The short-term momentum has shifted to the upside after the fast stochastic generated a crossing buy signal. Prices are excessively high. The fast stochastic is printing a reading of 95, over the overbought threshold of 80. Additionally, the RSI is reading 87, which is higher than the overbought trigger threshold of 70.

 

The medium-term trend has shifted to the positive. The MACD (moving average convergence divergence) histogram is in positive territory with an upward sloping trend, indicating that the underlying price of natural gas is accelerating.

 

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