Natural Gas, Commodities, Energy Prices, Inflation – Talking Points
- Natural gas gives up gains of roughly 2% following inventories report
- Price continues to struggle below key $4.000 psychological level
- Support remains through strong demand for US LNG exports
Natural gas prices traded lower on Thursday as the Energy Information Administration (EIA) released inventory data that was largely in-line with expectations. The report highlighted a withdrawal of 88 billion cubic feet (Bcf), compared to 118 Bcf at the same point in 2020. The pull of 88 Bcf also comes in lower than the 5 year average of 114 Bcf.
Courtesy of the Energy Information Administration
Prior to Thursday’s report, U.S. natural gas prices had traded higher by roughly 2% before giving back gains. Price has been underpinned of late by surging prices throughout Europe and Asia, which has kept demand for U.S. natural gas exports strong. The recent decline of natural gas prices will be welcomed by many, as fears were circulating just weeks ago about the impact of rising energy costs on households around the country. While prices remain broadly elevated according to Fed Chair Jerome Powell, there may be some respite in the decline in natural gas prices over the last few weeks.
Natural Gas Futures Daily Chart
Chart created with TradingView
Having fallen sharply around the turn of December, U.S. natural gas prices have since struggled to make a concerted effort to break back above the key $4.000 level. This remains near-term resistance, with the only break coming on a gap fill during Monday’s session. From a technical perspective, the recent consolidation in price sees a potential bear flag forming. Should the flag pattern be validated and break lower, U.S. natural gas prices could tumble toward pre-pandemic prices below $3.000 MMBtu.
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— Written by Brendan Fagan, Intern
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