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David Becker
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Natural gas prices were lower on Thursday ahead of Friday’s inventory report from the Department of Energy. Expectations are for a 164 Bcf draw according to survey provider Estimize. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal throughout the mid-west for the next 6-10 and 8-14 days. Demand rose in the latest week.

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Technical Analysis

Natural gas prices formed an inside day which is a higher low and a lower high which is a sign if indecision. Resistance is seen near the 10-day moving average at 2.69. Support is seen near the December lows at 2.26. 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. Short-term omentum has also turned negative as the fast stochastic generated a crossover sell signal.

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Demand Rises

The EIA reports that total U.S. consumption of natural gas rose by 5.7% compared with the previous report week. Natural gas consumed for power generation climbed by 9.6% week over week. In the residential and commercial sectors, consumption increased by 5.2%. Industrial sector consumption increased by 2.2% week over week. Natural gas exports to Mexico increased 8.3%.

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