Natural Gas Prices Consolidate on Warm Weather Forecast

Insight

Natural gas prices moved sideways on Monday. Trading remains rangebound as the weather continues to generate headwinds for prices. Natural gas supplies were unchanged week over week.

According to a report from NOAA, the weather in the U.S. is expected to be warmer than normal throughout most of the United States for the next 6-10 and 8-14 days.

According to the EIA, the U.S. average supply of natural gas is unchanged compared with last week. The average total supply of natural gas remained the same as in the previous report week, averaging 99.5 Bcf per day. Dry natural gas production grew by 0.9% compared with the previous report week, which was offset by a decrease in average net imports from Canada of 15.3% (0.9 Bcf/d) from last week.

Technical Analysis

Natural gas prices dropped on Monday. Support is seen near the 200-day moving average at 4.38. Resistance is seen near a downward sloping trend line that comes in near 5.28.

Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is above to turn negative. The MACD (moving average convergence divergence) index is making a crossover sell signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average, crosses below the 9-day moving average of the MACD line.