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David Becker
Crude Oil daily chart, July 29, 2019

Natural gas prices rebounded from session lows declining by 0.2%, after hitting a fresh lower low ahead of Thursday’s inventory report from the Department of energy. Prices are under pressure as supply rose in the latest week by demand was unchanged. There are two disturbances in the Atlantic but NOAA gives them a zero percent chance of forming a tropical cyclone in the next 48-hours.

Technical Analysis

Natural gas prices continues to trend lower after pushing through the 2019 lows at 2.16 which is now seen as short term resistance. Target support is now seen near the 2016 lows at 1.90 and then 1.62. Medium term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices for natural gas. Prices are oversold. The fast stochastic is printing a reading of 5, well below the oversold trigger level of 20 which could foreshadow a correction.

Supply rises, according to data from the EIA, the average total supply of natural gas rose by 1% compared with the previous report week. Dry natural gas production grew by 1% compared with the previous report week. Average net imports from Canada decreased by 4% from last week. Demand is flat. Total US consumption of natural gas was unchanged from the previous report week, averaging 68.3 Bcf/d according to data from the EIA. Natural gas consumed for power generation declined by 2% week over week despite reaching a record high on Friday. Industrial sector consumption increased by 4% week over week. In the residential and commercial sectors, consumption declined by 2%. Natural gas exports to Mexico decreased 1%.

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