EIA Storage Report in Focus After Bullish Export Outlook

EIA Storage Report in Focus After Bullish Export Outlook

Pure Gasoline Forecast – Speaking FactorsBullish EIA Quick-Time period Vitality Outlook bolsters spot costs Sturdy liquified natural gas (LNG) exp

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Pure Gasoline Forecast – Speaking Factors

  • Bullish EIA Quick-Time period Vitality Outlook bolsters spot costs
  • Sturdy liquified natural gas (LNG) exports anticipated to proceed
  • Value recaptures September trendline as technical posture improves

Pure gasoline costs are extending a transfer greater from earlier this week when the US Vitality Info Administration’s (EIA) month-to-month Quick-Time period Vitality Outlook bolstered its worth forecast for the heating gasoline. Per the report, the typical Henry Hub spot worth for 2021 is $3.07/MMBtu, up from final month’s worth of $3.05.

The EIA cites a modest decline in pure gasoline’s share of electrical energy energy technology within the US, falling to account for 36% of complete power generated in 2021 from 39% in 2020. Attributable to this, US pure gasoline consumption is anticipated to fall 0.5% to 82.9 billion cubic ft per day (Bcf/d) in 2021 from final yr. Coal is forecasted to absorb a few of that output hole, due partly to greater costs.

Sturdy liquefied pure gasoline (LNG) exports are one other driver behind the outlook from the EIA’s report. Certainly, LNG exports have been a powerful tailwind for spot costs, with rising European and Asian demand supporting US outflows. In reality, exports are at a document excessive stage following years of rising overseas demand for the heating product (See chart beneath).

Thursday will see the EIA’s Weekly Pure Gasoline Storage Report cross the wires, with analysts in search of a 99 billion cubic ft (Bcf) construct in pure gasoline shares for the week ended June 04. Stock builds are usually seen throughout an injection season, the place underground storage is elevated in the course of the low season heating cycle. A weaker-than-expected rise in storage could assist underpin costs within the brief time period.

nat gas chart

Chart created with TradingView

Pure Gasoline Technical Outlook

Pure gasoline worth features helped to recapture a trendline from the September swing low, which can act as assist transferring ahead. The 2021 swing excessive at 3.316 will seemingly be a significant take a look at ought to costs proceed to run greater. To the draw back, the 20-day Easy Shifting Common (SMA) is a doable space of assist, with the rising 50- and 100-day SMAs beneath that.

Whereas the upside seems to be the trail of least resistance following the trendline recapture, unfavorable divergences within the Relative Energy Index (RSI), in addition to the MACD oscillator spotlight doable weakening of momentum (highlighted within the chart beneath by the inexperienced traces). That mentioned, breaking into a brand new yearly excessive will seemingly be a tall activity even with the present sturdy technical posture.

Pure Gasoline Day by day Chart

natgas chart

Chart created with TradingView

Pure Gasoline TRADING RESOURCES

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the feedback part beneath or @FxWestwateron Twitter

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