Natural gas prices continued to rebound, following Thursday larger than expected draw in natural gas inventories according to a report from the Department of Energy. This came despite falling demand week over week. The weather is expected to become colder than normal over the next 6-10 and 8-14 days in the western portion of the United States but remains mild in the eastern section of the US.
Natural gas prices moved higher on Friday rising for the third consecutive trading session. Prices sliced through short term resistance near the 10-day moving average near 2.62, which is now seen as short term support. Additional support is seen near the November lows at 2.50. Resistance is now seen near the November highs at 2.90. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. Medium-term momentum is neutral as the MACD histogram is printing in red with a flat trajectory that points to consolidation.
Demand Declines in the Latest Week
The EIA reports that demand is lower across all sectors, led by declines in power burn. Total US consumption of natural gas fell by 5% compared with the previous report week, according to the EIA. Natural gas consumed for power generation declined by 7% week over week. Industrial sector consumption decreased by 1% week over week. In the residential and commercial sectors, consumption declined by 5%. Natural gas exports to Mexico were the same as last week, averaging 5.3 Bcf per day.
This article was originally posted on FX Empire
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