Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Natural Gas Outlook: Supply Chain Disruptions Boost LNG Spot Prices

Natural Gas Outlook: Supply Chain Disruptions Boost LNG Spot Prices

Warren Venketas, Analyst

NATURAL GAS (HENRY HUB) ANALYSIS

  • Weather, supply and logistical constraints aiding strengthening LNG prices
  • Focus for the week: Weekly storage report scheduled tomorrow
Advertisement

2021 has been a positive year for LNG spot prices with several factors contributing to it’s upward trajectory. Demand for the commodity has risen particularly in Asia and Europe due to cooler than expected weather conditions. Coupled with the last EIA storage report (see below) which shows a marked reduction (-130) in LNG stocks from December. These factors provided additional LNG price stimulus for January however, tomorrows storage data (10:30 EST) should give an insight into the increased demand on current stocks.

Weekly Natural Gas storage report:

weekly natural gas storage report

Source: EIA – U.S. Energy Information Administration

Trading Forex News: The Strategy
Trading Forex News: The Strategy
Recommended by Warren Venketas
Trading Forex News: The Strategy
Get My Guide

This increase in demand has put added pressure on supply as well as logistical capabilities. A shortage of LNG tankers has resulted in exorbitant transportation costs which naturally translates to the final price of the commodity. This interruption in the supply chain does not stop at tanker shortages but congestion present in the Panama Canal has forced tankers to find alternate routes to Asia. These routes are longer which increases travel time and ultimately does not meet demand needs.

Enhance your knowledge on Natural Gas with my Top Trading Strategies and Tips !

NATURAL GAS TECHNICAL ANALYSIS

Natural Gas daily chart:

Natural Gas daily chart

Chart prepared by Warren Venketas, IG

From the end of December up until now, Natural Gas prices have moved roughly 20%. Price action suggests a short-term uptrend in the midst of a medium-term downward trend. The June 2020 low marks the beginning of a diagonal support trendline (black) which serves as a key area in the event of further downside.

2.7805 (blue) highlights the recent swing high in December. This horizontal level has not been fully breached with yesterdays long upper wick candle formation indicating price rejection above 2.7805. Tomorrow’s storage report my give bulls the impetus to push above resistance and look toward the long-term area of confluence at 2.9225.

Should resistance hold, further downside may be evident with Monday’s swing low supplying initial support at 2.5765.

Starts in:
Live now:
Oct 03
( 12:10 GMT )
Keep up to date with price action setups!
Weekly Scalping Webinar
Register for webinar
Join now
Webinar has ended

Key points to consider:

  • Asian and European demand
  • Weekly storage data
  • Key resistance level breaks

--- Written by Warren Venketas for DailyFX.com

Contact and follow Warren on Twitter: @WVenketas

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES