Strong exports and increasing consumption in the US are likely to provide support to natural gas prices. Natural Gas March expiry contract prices are currently trading near $2.70, and are moderately high from last week’s lows of $2.41.
Some positive factors for Natural Gas prices are listed here, such as Natural Gas flows to US LNG export terminals on Thursday rose +17% y/y, to 10.6 bcf, according to Bloomberg data. US domestic natural gas demand on Thursday rose +9.9% y/y, to 107 bcf. US Natural gas production on Wednesday was down -3.9% y/y, to 90.092 bcf/d.
Meanwhile, US electricity output in the week ended January 23 fell -3.7% y/y, to 77,172 GWh (gigawatt hours), which is negative for NG prices.
Also, a mixed weather outlook is also likely to weigh upon prices. Data agency, Maxar, on Thursday, has said that the Central US would see above-average temperatures between February 3-4, but then cooler temperatures will follow in the week from February 6-10.
The Weekly Inventory report from the EIA is negative for natural gas prices. EIA natural gas inventories fell -128 bcf, against expectations of -137 bcf drop. Natural Gas Inventories are up +4.9% y/y, and are +9.3% above the 5-year average.
Natural gas February month expiry contract prices are likely to find support at $2.41, while key resistance is seen around $2.93-$3.06 levels.