This week, the average export of natural gas from the United States is forecasted at 10.4 billion cubic feet per day (μb). This is 26% more than in the same period of 2017. Will natural gas prices continue rising?
The US is implementing a large-scale program to increase the export of liquefied natural gas. In 2017, it increased 3.6 times. For the first time in 60 years, the US has become a net exporter of natural gas. This became possible due to the commissioning of the Sabine Pass LNG terminal. In 2019, the export of the American LNG should grow 3 times compared to the 2017 record year. The main buyers are China, South Korea, Japan and Brazil. Note that on Monday, the gas production in the US updated the historical high of 79.4 mb. At the same time, gas reserves in the US are at a 4-year low and amount to 1.311 trillion cube feet. This is by 27.5% lower than their 5-year average for the current period of the year.
On the daily timeframe, NATGAS: D1 is in a rising channel. The further price growth is possible in case of a further increase in LNG exports from the US.
- The Parabolic indicator gives bullish signals.
- The Bollinger bands® have narrowed, which indicates low volatility. They are titled upward.
- The RSI indicator is above 50, but it has not reached the overbought zone yet. No divergence.
- The MACD indicator is giving bullish signals.
The bullish momentum may develop in case NATGAS exceeds the last fractal high and the upper Bollinger band at 2.82. This level may serve as an entry point. The initial stop loss may be placed below the last fractal low, the lower Bollinger band and the Parabolic signal at 2.66. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level at 2.66 without reaching the order at 2.82, we recommend to close the position: the market sustains internal changes that were not taken into account.
Summary of technical analysis
Position Buy
Buy stop Above 2,82
Stop loss Below 2,66