Natural gas price surged on Tuesday, rebounding from 15% from the May lows, and closing at the session highs. This comes ahead of the Thursday inventory report from the Department of Energy. Expectations are for a 99 Bcf build. This follows last week’s 103 Bcf build. The weather is expected to be warmer than normal over the next 2-weeks, which is likely to weigh on energy demand. Energy demand is down as industrial usage declined sharply during the recent quarantines.
Natural gas prices have surged 15% in the last two trading session and it settled near its highs on Tuesday. Short-term resistance is seen near the 50-day moving average at 1.86. Support is seen near the 10-day moving average at 1.77. Below that level support is seen near the May lows at 1.60. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. The current reading on the fast stochastic is 43, which is in the middle of the neutral range.
EIA Expects 2020 Consumption to Decline
EIA expects total consumption of natural gas to average 81.7 billion cubic feet per day in 2020, down 3.9% from the 2019 average primarily because of lower industrial sector consumption of natural gas. During the “shelter in place” most non-essential building was shut reducing industrial and electrical demand. EIA forecasts industrial natural gas consumption to average 21.3 Bcf per day in 2020, down 7.1% from 2019 as a result of lower expected manufacturing activity.
This article was originally posted on FX Empire
More From FXEMPIRE:
- S&P 500 Price Forecast – Stock Markets Continue to Show Resistance Above
- Natural Gas Price Prediction – Prices Rally Ahead of Inventory Data
- Crude Oil Price Forecast – Crude Oil Markets Approach Major Gap
- E-mini S&P 500 Index (ES) Futures Technical Analysis – Fib Level at 2930.25 Controlling Direction
- Oil Pulls Back After Major Upside Move
- US Stock Market Overview – Stocks Close Lower Led Down By Energy