Natural Gas Prices Slip But Climb for the Week

Natural gas prices were lower on Friday but finished the week in the green. The weather is expected to be colder than normal in the mid-West and West Coast for the next 2-week. The colder air should increase natural gas demand. In the latest week, the natural gas rig count increased by 6 while oil rigs increased by 4.

Technical Analysis

Natural gas prices moved lower but remain above support near the 10-day moving average at 4.27. Resistance is seen near the February highs at 4.86. The 10-day moving average crossed below the 50-day moving average which means that a short-term down trend is now in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is poised to turn positive as the MACD (moving average convergence divergence) index generated a crossover buy 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.

U.S. total natural gas supply rises this week with increasing production. The average total supply of natural gas rose 3.2% this week compared with the previous report week, more than offsetting last week’s 2.7% week-over-week decline. Dry natural gas production grew by 5.1% compared with the previous report week, while average net imports from Canada decreased by 20.2% from last week.