U.S. natural gas prices rise 3% on cold weather forecasts and increased LNG exports
Natural gas rises with cold weather forecasts and LNG export surge
U.S. natural gas futures climbed by 3% to $3.70 per million British thermal units (MMBtu) amid forecasts for colder-than-average temperatures and rising liquefied natural gas (LNG) exports. Meteorologists predict that temperatures will drop significantly between January 6 and January 17, boosting heating demand across key regions.
The increased need for heating has already started to impact market sentiment, with traders positioning for further demand spikes.
Natural gas price dynamics (Nov 2024 - Jan 2024) Source: TradingView.
LNG exports and geopolitical pressures
Natural gas flows to the U.S.’s eight major LNG export plants have risen steadily in recent weeks, reinforcing bullish sentiment in the market. Analysts note that export flows may increase further following the expiration of an agreement that allowed Russia to send natural gas to Europe via Ukraine. This development has heightened Europe’s dependency on U.S. LNG, further supporting price gains.
Despite the recent surge, 2024 marked the first annual decline in U.S. LNG feedgas volumes since the country began exporting LNG in 2016. Analysts attribute this to geopolitical disruptions and weaker demand in Asia and Europe earlier in the year.
Technical analysis: bearish trend amid recent gains
Natural gas is currently trading at $3.43, down 2.53% from the previous session, indicating continued market volatility. The price has broken below its key pivot point at $3.61, signaling bearish sentiment. The 4-hour chart shows a breakout from an upward channel, suggesting further downside risks.
Immediate support is seen at $3.35, with stronger support at $3.16, where buyers may re-enter the market. On the upside, $3.61 remains the key resistance level, followed by $3.92 and $4.20. The 50-day exponential moving average (EMA) at $3.50 has turned into a resistance level, reinforcing the bearish bias. Meanwhile, the 200-day EMA at $3.09 indicates a long-term support zone.
The natural gas market remains sensitive to changing weather patterns and geopolitical developments. A sustained move below $3.35 could accelerate selling pressure, while a break above $3.61 may signal a bullish reversal. Traders will closely monitor weather forecasts and updates on LNG export trends for further market direction.
Previously, we analyzed the impact of the expiration of the Ukraine-Russia transit agreement on European gas prices. This development, coupled with heightened winter demand, continues to influence global natural gas dynamics.
