Natural Gas Price Rise but Warm Weather Looms

Natural gas prices edged higher, edging back to trend line resistance which was former support. Prices did not get a boost from the news that Russia was likely to invade Ukraine. The White House told American’s in Russia to leave the country within the next 24-48 hours. The weather is expected to be warmer than normal throughout most of the United States for the next 2-weeks. Rig counts for natural gas installations grew more than expected but were dwarfed by the large increase in oil rigs.

 Technical Analysis

Natural gas prices edged higher. Support is seen near the January lows at 3.78. Resistance is seen near the 50-day moving average at 4.08. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are oversold. The fast stochastic is printing a reading of 9, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line.

The Rig Count Rises

Baker Hughes reported this week that the total active rig figure oil, gas, and miscellaneous is 238 rigs higher than the rig count this time in 2021. Oil-directed rigs rose 19 to 516, while gas-directed rigs were up by 2 to 118. Miscellaneous rigs were also up 1.