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David Becker
Natural Gas
Natural Gas

Natural gas prices moved higher on Monday as colder than normal weather is forecast to move east generating additional heating demand during the balance of October.  While supply over the past week was flat, demand increased as higher power generating was need increasing consumption by 1%. The trajectory of inventory injections remains flat, which should increase demand over the next 2-weeks.

Technicals

Natural gas prices moved higher rising by 2.88%, making a higher high and a lower high which is an uptrend. Support is seen near the 10-day moving average at 3.21. Resistance is seen near the October highs which coincides with a downward sloping trend line that comes in near 3.36. Momentum is flat as the MACD (moving average convergence divergence) histogram prints in the black with a flat trajectory which points to consolidation.

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Supply Was Flat This Week

Supply remains flat in the latest week according to the EIA as the average total supply of natural gas remained the same as in the previous report week, averaging 91.1 Bcf per day. Dry natural gas production also remained constant week over week. Average net imports from Canada increased by 2% from last week.

Demand Increased

Demand increases with higher power generation. Total U.S. consumption of natural gas rose by 1% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 4% week over week. Industrial sector consumption decreased by 2% week over week. In the residential and commercial sectors, consumption declined by 1%. Natural gas exports to Mexico decreased 3%.

U.S. LNG exports are flat week over week

Four LNG vessels with a combined LNG-carrying capacity of 15 Bcf departed the United States from October 4 to October 10. One tanker (was loading at Sabine Pass on Wednesday. There were no LNG exports from the Cove Point liquefaction terminal last week and no natural gas feedstock deliveries by pipeline as the facility continues its scheduled maintenance.

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