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David Becker

Natural gas prices declined in Wednesday ahead of Thursday inventory report from the Department of Energy. Expectations are for a 40 Bcf increase in natural gas stockpiles according to survey provider Estimize. This compares to last weeks 33 Bcf increase. There is a tropical depression (number Eleven) that has formed in the Atlantic but the trajectory of the storm does not have it coming near any US natural gas installations. The weather is expected to be warmer than normal in the South West and West and cooler than normal in the mid-west.

Technical Analysis

Natural gas prices decline approximately 1% on Wednesday but rebounded into the close. Prices bounded near support at the 10-day moving average near 2.10. Resistance is seen near the August highs at 2.28. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is negative to neutral as the MACD (moving average convergence divergence) histogram is printing in the black with a declining trajectory which points to consolidation.

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US Sets a Record for Natural Gas Power Consumption

In the US natural gas consumed by electric power plants set a record high of 46.7 billion cubic feet on Monday, July 27, according to the EIA. On the same day, natural gas-fired capacity reached an all-time high dispatch level, reaching 315,989 megawatts in the late afternoon, according to EIA’s Hourly Electric Grid Monitor.v

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