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David Becker
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Natural gas prices moved sideways for a second consecutive trading session following the EIA  natural gas inventory report. The weather is expected to be much warmer than normal over the next 6-10 days, especially in the North East. Over the next 8-14 days, the weather is expected to moderate slightly in the North East but remain warmer than normal on both the East Coast and the West Coast. There are two storms in the Atlantic that have come off Africa. One has a 30% chance of turning into a tropical cyclone over the next 48-hours. The other has a very little chance.

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Technical Analysis

Prices moved sideways, but the trend remains upward sloping after prices broke out on Wednesday. Support is seen near the 10-day moving average at 4.04. Target resistance is seen near the 2018 highs at 4.92. Short-term momentum has turned neutral as the fast stochastic nearly generated a crossover sell signal. The current reading on the fast stochastic is 83, above the overbought trigger level of 80, which foreshadows a recession. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in positive territory with an upward sloping trajectory which points to higher prices.

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Gas Supply Decline

U.S. overall supply declines 0.2% week over week on slightly lower Canadian imports. According to data from the EIA total average total supply of natural gas fell by 0.2%, or 0.2 Bcf per day, compared with the previous report week. While domestic dry natural gas production grew by 0.1% compared with the previous report week, average imports from Canada decreased by 5.5%, resulting in the net decrease.

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