Natural gas prices rebounded near support levels, bouncing after tumbling on Tuesday. Prices rose following a report from the National Oceanic Atmospheric Administration that showed that the weather will be colder than normal for the next 6-10 and 8-14 days. Cold weather will buoy heating demand. There are currently no possibilities of a tropical cyclone in the Atlantic or Gulf during the next 48-hours according to NOAA. Demand is down in the latest week, led by a large decline in power generation.
Natural gas prices rebounded near support following a drop of 3% on Monday. Support is seen near an upward sloping trend line that comes in near 2.20. Prices are hovering near resistance is seen near the 10-day moving average at 2.27. Additional resistance is seen near the October highs at 2.38. Short term momentum has is whipsawing turning positive on Tuesday after turning negative on Monday which generally points to consolidation. Medium-term momentum is flat as the MACD (moving average convergence divergence) is moving sideways. The MACD histogram is printing near the zero-index level with a flat trajectory that points to consolidation.
Demand Moved Lower
Demand is down in all sectors, according to a report by the Energy Information Administration. Total US consumption of natural gas fell by 1% compared with the previous report week. Natural gas consumed for power generation declined by 7% week over week. Industrial sector consumption decreased by 2% week over week. In the residential and commercial sectors, consumption increased by 22% as heating and cooling demand was moderate with seasonal autumn temperatures. Natural gas exports to Mexico decreased by 3%.
This article was originally posted on FX Empire
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