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David Becker

Natural gas prices declined on Friday giving back the gains it experienced on Thursday but settled off the lows of the session. The weather is expected to be warmer than normal for the next 6-10 and 8-14 days according to the last forecast from NOAA. In its Short-Term Energy Outlook, the U.S. Energy Information Administration forecasts that U.S. natural gas exports will exceed natural gas imports by an average of 7.3 billion cubic feet per day. Supply rose in the latest week with the average total supply of natural gas rose by 1% compared with the previous report week.


Natural gas reversed Thursday gains and closed down 5.7% for the week. Support on natural gas is seen near the January lows at 1.83. Resistance is seen near the 10-day moving average at 2.04. Short term momentum is neutral as the fast stochastic moves sideways, generating consecutive sell and buy signal. Medium-term momentum is negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices. Natural gas prices are oversold. The RSI (relative strength index) is printing a reading of 27, below the oversold trigger level of 30 which could foreshadow a correction.

Supply increased in the latest week according to the EIA. The average total supply of natural gas rose by 1% compared with the previous report week. Dry natural gas production decreased by 1% compared with the previous report week. The average net imports from Canada increased by 62% from last week to meet winter demand in the Northeast and Midwest markets.

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