Natural gas prices moved higher rising 1.25% on Friday and up more than 5% for the week. Tropical storm Hanna has now formed in the Gulf of Mexico and is headed directly for the Texas coast. There are some natural gas installations that will be impacted by the storm. Tropical storm Gonzalo is headed for the Caribbean and could make its way into the Gulf of Mexico. There is a new storm that has moved off the coast of Africa, but there is very little chance at the moment that it will form a tropical cyclone. Supply rose in the latest week according to a recent report from the Energy Information Administration.
Natural gas prices rose 1.25% on Friday running into resistance near the 50-day moving average at 1.81. Support is seen near the 10-day moving average at 1.73. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.
Supply Rose in the Latest Week
The average total supply of natural gas rose by 0.6% compared with the previous report week according to the EIA. Dry natural gas production grew by 0.9% compared with the previous report week as some production in the Appalachian Basin that was previously curtailed in mid-May began to return. Dry natural gas production is now 0.2% higher on average this week compared to this time last year when Hurricane Barry caused temporary shut-ins in the Gulf of Mexico. The average net imports from Canada decreased by 3.1% from last week.
This article was originally posted on FX Empire
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