LNG Value Motion Approaches Lengthy-Time period Resistance

NATURAL GAS (HENRY HUB) ANALYSIS

• LNG appears to be like essentially bullish
• Low storage – supportive of sustained upward value motion
• Key technical degree breaks might immediate important value strikes

LNG FUNDAMENTAL BACKDROP

LNG spot costs have surged contemporary highs final seen in 2018. Essentially, demand from East Asia and the Pacific (inexperienced) area on the chart under has steadily elevated. Asia is getting into their summer time interval which historically comes with greater LNG demand as a result of rising temperatures. The Asian area is essential to general pure gasoline consumption as Japan and China are two of the most important importers of LNG globally. Climate analytics will play a key function because the Asian summer time develops as a result of any surprising rise in summer time temperatures might spark unexpected demand.

LNG EXPORTS BY REGION

Chart ready by Warren Venketas,Refinitiv

The provision facet reveals a slight uptick in stock as per final week nonetheless, in comparison with final 12 months and the 5-year common present stock knowledge is considerably decrease. This helps the current bullish bias surrounding LNG spot costs.

LNG STORAGE DATA

Chart ready by Warren Venketas,EIA

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NATURAL GAS TECHNICAL ANALYSIS

Pure Gasoline Weekly Chart:

Chart ready by Warren Venketas, IG

The weekly pure gasoline chart highlights the long-term trendline resistance degree (black) that has beforehand been examined in late 2018. This trendline has held firmly for a few years and just lately has come into consideration as a consequence of bullish LNG value motion. The 4.000 psychological zone coincides with trendline resistance which may very well be key ought to costs shut greater on the weeks shut.

Pure Gasoline Each day Chart:

Chart ready by Warren Venketas, IG

The day by day chart illustrates the sturdy upward transfer earlier this week as LNG costs broke above the rectangle sample (yellow). Bullish momentum appears to be slowing in line with the Relative Energy Index (RSI) which opposes present value motion. Opposing actions between the 2 level to divergence – extra particularly bearish divergence which can see costs retrace decrease.

Bears can be on the lookout for a reversal with the 20-day EMA as preliminary help after which the 61.8% Fibonacci at 3.963 will come into consideration – Fibonacci taken from November 2018 excessive to June 2020 low.

From the bullish perspective, a break above 4.000 might help additional upside in direction of the 76.4% Fibonacci at 4.128.

— Written by Warren Venketas for DailyFX.com

Contact and observe Warren on Twitter: @WVenketas