Natural gas prices rebounded late in the trading session rallying 2.5% in to the close. Several storms are in the Gulf of Mexico and the Atlantic Ocean. Hurricane Sally is poised to make landfall and has cut off approximately 20% of the Natural gas production in the Gulf of Mexico. There are 2-tropical storms in the Atlantic but neither are expected to impact natural gas production. There is one additional disturbance in the Gulf of Mexico that has a 20% chance of turning into a tropical cyclone in the next 48-hours according to NOAA. The weather is expected to be warmer than normal in the west and mid-west and cooler than normal throughout the east coast.
Natural gas prices rebounded on Tuesday, as storms continue to race through the Gulf of Mexico. Support is seen near the 50-day moving average at 2.25. Resistance is seen near the 10-day moving average at 2.42. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 14, below the oversold trigger level of 20 which could foreshadow a correction.
Exports Have Declined
Natural gas LNG net exports have begun declining in spring 2020 as a result of a global economic slowdown amid the spread of the coronavirus disease and related containment efforts. Starting in April, U.S. natural gas traded as liquefied natural gas (LNG) and by pipelines declined significantly, according to the U.S. Energy Information Administration.
This article was originally posted on FX Empire
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