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David Becker

 

Natural Gas prices whipsawed again despite declining inventories and a cold weather forecast. Prices made a lower low and were unable to hold up at elevated levels. The weather is expected to much colder than normal over the next 6-10 days and then colder than normal, moderating slightly during the 8-14 days over most of the United States. Demand rose in the latest week according to the EIA.

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Technical Analysis

Natural gas prices whipsawed trying to move lower but failed to gain traction and consolidated. Support is seen near the 10-day moving average at 2.84. Resistance is seen near the February highs at 3.06. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in positive territory with a declining trajectory which points to consolidation.

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Demand Rose

Demand rises driven by demand for space heating. According to data from the EIA, total U.S. consumption of natural gas rose by 3.6% compared with the previous report week. Natural gas consumed for power generation declined by 2.5% week over week. In the residential and commercial sectors, consumption increased by 7.9%. Industrial sector consumption increased by 3.2% week over week. Natural gas exports to Mexico increased 3.5%.

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