Natural gas prices moved lower on Thursday dropping 2.3% ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 57 Bcf build in natural gas stockpiles according to survey provider Estimize. This compares to last week’s 65 Bcf build, reported on 7/2/20 by the EIA. There is one low-pressure system in the Atlantic with a 70% percent chance of forming a tropical cyclone but it is off the coast of North Carolina, and not likely to impact any natural gas drilling rigs. The supply moved higher driven by imports.
Natural gas prices moved lower opening down on the day and continuing to drop throughout the session following Tuesday’s rally which failed to pierce through resistance. Support is seen near the 10-day moving average at 1.72. Resistance is seen near the 50-day moving average at 1.91. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal and declined into neutral territory. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
US Supplies are Rising
Supply rose in the US driven by an increase in imports from Canada. According to data from EIA, the average total supply of natural gas rose by 0.6% compared with the previous report week. Dry natural gas production decreased by 0.3% compared with the previous report week. The average net imports from Canada increased by 13.0% from last week, with increased flows at border crossing points in the Northeast to meet regional demand.
This article was originally posted on FX Empire
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