Natural Gas Edges Lower ahead of Thursday Inventory Report

Natural gas prices edged lower on Wednesday after breaking out to 4-month highs on Monday. Lower than average inventories and warmer than expected weather have helped buoy prices.  Worse than expected housing starts weighed on prices. Traders await Thursday inventory report from the Department of Energy.

Natural gas made a lower high and a lower low forming an correction. Support is seen near the 10-day moving average at 2.77. Resistance is seen near the November highs at 3.2. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal.

Housing Starts Dipped

U.S. April housing starts fell 3.7% to 1.287 million after rising 3.6% to 1.336 million which was revised from 1.319 million. Building permits declined 1.8% to 1.352 million following the 4.1% gain to 1.377. Starts were lower in the Northeast, the Midwest  and West, but higher in the South. Single family starts rose 0.1% to 0.894 million after a 0.8% drop to 0.893 million which was 0.867 million. Multifamily starts plunged 11.3% to 393 million after climbing 13.6% to 0.443 million which was 0.452 million. Housing completions grew 2.8% to 1.257 million after falling 5.1% to 1.223 million which was 1.217 million.

Canada manufacturing shipment values grew

Canada manufacturing shipment values grew 1.4% in March after a revised 2.7% gain in February. The increase in March matched expectations. Sales improved in 13 of 21 industries during March. Firmer sales at primary metal aerospace products and parts, fabricated metal and other transportations equipment industries drove the increase in total shipment values. Total sales volumes were up 0.6% in March. This is an encouraging report, suggestive of further growth in the economy during March after the rebound in February from the temporary factor induced contraction in January GDP.