Natural Gas Slips But Remain in Upward Trend

Natural gas prices were lower early on Wednesday, ahead of Thursday’s inventory report from the EIA.  The weather was cooler than normal in the latter part of April and it should be no surprise if inventories continue to draw.  May temperatures are expected to be warmer than normal which will allow gas inventories to build.

Technicals

Natural gas is testing support near the 10-day moving average. Prices are gliding upward in a rebound trend.  Additional support is seen near and upward sloping trend line that comes in near 2.71. Momentum is negative to neutral. The MACD (moving average convergence divergence) histogram is prints near the zero-index level with a flat trajectory which reflects consolidation. The fast stochastic is turning over which reflects accelerating negative momentum.

Ferc Approves Rover Pipeline

According to the Energy Information Administration, the Federal Energy Regulatory Commission approved a portion of Rover Pipeline, LLC’s April 13 request to place key facilities associated with Phase 2 of the Rover pipeline project into service. In addition to compressor station and mainline facilities, the filing also requested permission to place the Vector meter station in Livingston County, Michigan, into service, as well as the new pipeline market segment connecting that meter station to the Defiance, Ohio, compressor station.

Demand falls as temperatures warm

Demand falls as temperatures warm. Total U.S. consumption of natural gas fell by 6% compared with the previous report week, according to the EIA. In the residential and commercial sectors, consumption declined by 14%, as weather was warmer than normal west of the Rocky Mountains and close to normal on the eastern seaboard. Natural gas consumed for both power generation and in the industrial sector declined by 2% week over week. Natural gas exports to Mexico decreased 1%.

Temperatures were moderate

Temperatures were moderate, but remain colder than normal, across the eastern United States and Midwest during the storage week. The National Oceanic Atmospheric Administration forecasts the weather over the next 8-14 days to be warmer than normal, which could increase cooling demand especially in the South and West.  April was one of the coolest months on record which kept inventories depressed ahead of the injection season.