Natural gas prices surged another 2.5% on Tuesday. Tropical depression 15, forming in the Atlantic and there is one other storm that has less than a 10% chance of becoming a tropical cyclone. There is also one storm in the Gulf of Mexico with a 10% chance of becoming a tropical cyclone. The weather is expected to be colder than normal throughout most of the mid-west which could buoy natural gas heating demand.
Natural gas prices rallied sharply and is poised to test resistance near the October highs at 2.40. Support on natural gas is seen near the 10-day moving average at 2.28 and then the October lows at 2.18. Short term momentum has flipped and turned positive in oversold territory as the fast stochastic generated a crossover buy signal. Additionally, the current reading on the fast stochastic is 43, above the oversold trigger level of 20 and in the middle of the neutral range. The fast rebound in the fast stochastic reflects accelerating positive momentum. Medium-term momentum as turning and the MACD (moving average convergence divergence) is poised to generate a crossover buy signal.
Export Demand is Flat Week over Week
The Energy Information Administration reports that liquid natural gas exports are flat week over week. Eleven LNG vessels, according to the EIA, with a combined LNG-carrying capacity of 41 Bcf departed the United States between October 3 and October 9. One vessel was loading at the Sabine Pass LNG terminal on Wednesday. Net injections into storage totaled 98 Bcf for the week ending October 4, compared with the five-year average net injections of 89 Bcf and last year’s net injections of 91 Bcf during the same week.
This article was originally posted on FX Empire
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