Natural gas prices slumped on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for inventories to climb by 28 Bcd according to survey provider Estimize. The weather is expected to remain colder than normal for the next 6-10 and 8-14 days according to a recent forecast from the National Oceanic Atmospheric Administration. Demand moved lower driven by declines in power generation.
Natural gas prices slumped on Wednesday ahead of the Energy Department’s estimate of inventories. Prices made a higher high and a lower high which is a sign of an uptrend. Resistance is seen near former support at the 50-day moving average at 1.83. Additional support is seen near the 10-day moving average at 1.68. Short term momentum has flipped flopped and turned negative. The fast stochastic generated a crossover sell signal. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
Demand is down, driven by declines in power generation and building consumption. Total US consumption of natural gas fell by 7% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation declined by 7% week over week. In the residential and commercial sectors, consumption declined by 10%. Industrial sector consumption decreased by 4% week over week. Natural gas exports to Mexico decreased by 2%.
This article was originally posted on FX Empire
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