Natural Gas Prices Whipsaw on Warm Weather Forecast

Natural gas prices whipsawed and closed higher after rising sharply on Monday.  Markets. Prices should be capped by local demand as the weather is expected to be warmer than normal throughout most of the United States for the next 2-weeks. Natural gas supplies fell in the latest week.

 Technical Analysis

Natural gas prices moved higher but met resistance near the 10-day moving average at 4.38. Support is seen near the 200-day moving average at 4.22. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold. The fast stochastic is printing a reading of 18, 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.

Supplies Fall in the Latest Week

U.S. total natural gas supply falls this report week due to decreased dry natural gas production. According to data from the EIA, the average total supply of natural gas fell by 2.7% compared with the previous report week. Dry natural gas production decreased by 3.6%, while average net imports from Canada increased by 9.1% week over week.