Natural gas prices surged higher on news that Warren Buffet was purchasing part of Dominion Resources. Prices shot higher but finished well off session lows. There is a disturbance that is headed toward the Gulf of Mexico with approximately a 10% chance of forming a tropical cyclone according to the National Oceanic Atmospheric Administration (NOAA). The weather is expected to be warmer than normal for the next two weeks according to another report from NOAA. Exports of natural gas are set to rise into Mexico according to a recent report by the EIA.
Natural gas prices shot higher on the open hitting 1.86 and closing up 2.3% at 1.79. Prices remained above trend line resistance which is now a support level near 1.73. Target resistance is seen near the 50-day moving average at 1.93. Medium-term momentum remains positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (9-day moving average of the MACD line).
Exports to Mexico are Set to Rise
The EIA reports that exports are set to increase with the completion of the southern-most segment of the Wahalajara system, the Villa de Reyes-Aguascalientes-Guadalajara (VAG) pipeline. VAG began operations in June 2020, connecting new demand markets in Mexico to U.S. natural gas pipeline exports.
This article was originally posted on FX Empire