Natural Gas Consolidates as Rigs Counts Remain Flat

Natural gas prices whipsawed closing near the lows of the trading session.  The weather was mixed this week, and draws from inventories came in as expected.  Active rig counts were nearly unchanged in the U.S. but lower in Canada. Prices are rangebound but bounced at support near the 10-day moving average at 2.68. Resistance is seen near a downward sloping trend line that comes in near 2.76. momentum is flat as the RSI (relative strength index) prints at 50, which is in the middle of the neutral range and reflects consolidation.

Active Rig Counts Climb

Baker Hughes reported a 10-rig increase to the number of oil and gas rigs this week. The total number of oil and gas rigs now stands at 1003, which is an addition of 164 rigs year over year. The number of oil rigs in the United States increased by 11 this week, for a total of 808 active oil wells in the US. The number of gas rigs held steady this week, still at 194; 29 rigs above this week last year. The oil and gas rig count in the United States has increased by 80 in 2018. While US drillers seem determined to add rigs, Canada continued its brutal losing streak, with a decrease of 23 oil and gas rigs, after losing 168 rigs last week in the four weeks prior. At just 111 total rigs, Canada now has 21 fewer rigs than it did a year ago.

Canada employment grew

Canada employment grew 32.3k in March following the 15.4k gain in February. The increase was better than expected. The part/full time jobs split was encouraging: full time jobs jumped 68.3k after the 39.3k drop in February. Part time jobs fell 35.9k following a 54.7k bounce. The unemployment rate was 5.8%, matching the 40-year low 5.8% seen in February. The participation rate was 65.5, unchanged from 65.5 in February. Average hourly wages expanded at a 3.1% year over year pace in March, matching the 3.1% growth rate in February.