Natural gas prices tumbled on Wednesday ahead of Thursday inventory report from the Department of Energy. Expectations are for a 58 Bcf draw according to a poll conducted by Estimize. The weather is expected to turn cooler than normal throughout most of the mid-West during the next 6-10 and 8-14 days. There currently is a tropical storm rotating in the upper Atlantic but it’s unlikely to generate any problems for natural gas installations. Production of natural gas continued to increase in August.
Natural gas prices dropped on Wednesday finding support near the 10-day moving average near 2.16. A break of that level could lead to a test of the August lows at 2.02. Resistance is seen near the August highs at 2.27. Momentum is neutral to negative. The fast stochastic is chopping sideways, and hovering near the middle of the neutral range. The MACD is printing in the black with a declining trajectory which points to consolidation.
Production is Rising
The EIA reports that natural gas production continued to increase in August despite relatively low natural gas spot prices, setting a new daily production record of 92.1 billion cubic feet per day on August 5, 2019. Natural gas production increased by 1.5 Bcf/d between May and August 2019, led by production gains primarily in the Northeast. The northeastern region continues to be the largest natural gas-producing region in the country, accounting for 34% of the US total. Average daily production levels in that region reached a new high of 32.2 Bcf/d in the first week of August, 1.5 Bcf/d higher than its monthly average in May. Total demand rose +1.4 bcf per day to +77.7 bcf per day. Power demand rose. Industrial demand rose.
This article was originally posted on FX Empire
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