EIA Storage Report in Focus After Bullish Export Outlook

EIA Storage Report in Focus After Bullish Export Outlook

Pure Gasoline Forecast – Speaking FactorsBullish EIA Brief-Time period Power Outlook bolsters spot costs Robust liquified pure gasoline (LNG) expo

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Pure Gasoline Forecast – Speaking Factors

  • Bullish EIA Brief-Time period Power Outlook bolsters spot costs
  • Robust liquified pure gasoline (LNG) exports anticipated to proceed
  • Worth recaptures September trendline as technical posture improves

Pure gasoline costs are extending a transfer larger from earlier this week when the US Power Data Administration’s (EIA) month-to-month Brief-Time period Power Outlook bolstered its worth forecast for the heating gasoline. Per the report, the common 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 vitality 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 partially to larger costs.

Robust 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 truth, exports are at a report excessive degree following years of rising international demand for the heating product (See chart beneath).

Thursday will see the EIA’s Weekly Pure Gasoline Storage Report cross the wires, with analysts on the lookout for 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 through the low season heating cycle. A weaker-than-expected rise in storage could assist underpin costs within the quick time period.

nat gas chart

Chart created with TradingView

Pure Gasoline Technical Outlook

Pure gasoline worth positive aspects 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 possible be a serious check ought to costs proceed to run larger. To the draw back, the 20-day Easy Transferring Common (SMA) is a potential 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, adverse divergences within the Relative Power Index (RSI), in addition to the MACD oscillator spotlight potential weakening of momentum (highlighted within the chart beneath by the inexperienced strains). That mentioned, breaking into a brand new yearly excessive will possible be a tall job even with the present robust technical posture.

Pure Gasoline Day by day Chart

natgas chart

Chart created with TradingView


— Written by Thomas Westwater, Analyst for DailyFX.com

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

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