Natural gas prices rebounded from session lows but closed lower on the session, after tumbling on Thursday. The larger than expected build in natural gas inventories in conjunction with Texas pausing and repealing some of the business openings is putting downward pressure on prices. On Friday, Baker Hughs, the oil services giant, reported a decline in natural gas and oil rigs for the 16th consecutive week.
Natural gas prices edged lower but rebounded from session lows, after hitting a 25-week low on Friday. Target support is now seen near the 1995 lows at 1.25, and then the all-time lows near 1.00. Resistance is seen near the recent breakdown level at 1.52 and then the 10-day moving average at 1.60. Momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices. The fast stochastic also recently generated a crossover sell signal. The current reading on the fast stochastic is 8, below the oversold trigger level of 20 which could foreshadow a correction.
Rig Count Continues to Fall
Baker Hughes reported on Friday that U.S. rig count fell for the 16th straight week. Energy companies are operating 265 oil and gas rigs nationally, one fewer than a week ago. There are 188 oil rigs and 75 natural gas rigs.
This article was originally posted on FX Empire
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