Natural Gas Prices Fall but Remain Rangebound

Insight

Natural gas prices moved lower on Tuesday. Trading remains rangebound as the weather continues to remain subdued during the shoulder season.

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. U.S. consumption was down week over week.

U.S. average natural gas consumption is down across most demand sectors this week. Total average U.S. consumption of natural gas fell by 13.3% compared with the previous report week, according to data from the EIA. Consumption in the residential and commercial sectors declined by 20.8% as above-average temperatures stretched across most of the United States. Natural gas consumed for power generation declined by 10.9% and industrial sector consumption decreased by 3.8% week over week.

Technical Analysis

Natural gas prices eased on Tuesday. Support is seen near the 200-day moving average at 4.39. Resistance is seen near a downward sloping trend line that comes in near 5.28.

Short-term momentum has turned negative the fast stochastic generated a crossover sell 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.