Natural gas prices rose noticeably at the beginning of the week, recovering from a significant decline in December. The price of the energy carrier rose by 14%, the largest increase since July 2022. The reason was forecasts for colder temperatures in northern regions of the U.S. through the end of January. Predictions of severe cold weather are widely spread, which increases the risk of supply disruptions that occur when liquid freezes in pipelines.
In line with the data from a specialized hydrometeorological agency Maxar Technologies Inc., temperatures are expected to drop 11 degrees Celsius in parts of the midwestern United States. This is below normal temperature levels.
According to the latest short-term forecast of the Energy Information Administration (EIA), this year the United States will once again set records in terms of gas production and demand. In addition, the organization's specialists expect high values for U.S. exports of liquefied natural gas (LNG).
Last year, gas production in the U.S. reached a maximum of 103.55 billion cubic feet per day (bcfd). This value could rise to 105.04 bcfd in 2024.
According to the EIA, the country's consumption of gas will also break the record set last year and is expected to reach 89.89 bcfd (+1.1%). In 2025, the figure would drop slightly but remain above the 2023 high of 88.90 bcfd.
In the past year, the U.S. also became the world's leading LNG exporter, displacing Australia and Qatar. In 2024, U.S. supplies abroad would increase to 12.36 bcfd (+4.4%), and in 2025 — to 14.43 bcfd.
Natural gas prices are forming an uptrend on the H4 timeframe. The price is aiming for last fall's high of 3,627. The Bulls Power indicator (standard values) is still in the positive zone, indicating an upward movement.
Signal:
The short-term outlook for natural gas is to buy.
The target is at 3,635.
Part of the profit should be fixed at 3,365.
A stop-loss should be placed at 2,667.
The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
This content is for informational purposes only and is not intended to be investing advice.
