Natural gas prices consolidated on Tuesday after tumbling Monday as concerns of the spread of the coronavirus continued to weigh on the energy complex. The lack of growth in China and the rest of Asia could reduce demand for LNG, which is a source of demand for the natural gas industry. The weather is expected to be warmer than normal over the next 6-10 and 8-14 days according to the National Oceanic Atmospheric Administration.
Natural gas rebounded slightly climbing 0.8% after dropping nearly 4% on Monday. Prices are poised to retest the February lows at 1.74, as short-term momentum turns negative. Resistance on natural gas is seen near the 10-day moving average at 1.87. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The MACD histogram is printing in the black with a sliding trajectory which points to consolidation. The relative strength index moved lower and reflects accelerating negative momentum. The current reading of the RSI is 42, which is in the middle of the neutral range and reflects consolidation.
Demand increased in the latest week driven by demand for space heating. Total US consumption of natural gas rose by 3% compared with the previous report week, according to data from the EIA. In the residential and commercial sectors, consumption increased by 7%. Natural gas consumed for power generation declined by 1% week over week. Industrial sector consumption increased by 1% week over week.
This article was originally posted on FX Empire
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