Natural Gas Short Term View

Image from: PEXELS 

Nat Gas prices managed to close positive on Friday, but it declined for the week. Mild weather did not increase natural gas electricity demand. The larger than forecasted build in natural gas inventories continue to weigh on natural gas prices.

Natural gas prices bounced from the psychological level of 160 on MCX  but ended the week in the red. There is no sign of trend reversal yet on the technical chart. Below 160 NG may also go near 155-153.80. We should wait for positive data or news for a short-term trend reversal. Prices likely to remain range-bound next week.

Although prices are nearly oversold region. The RSI which is a momentum oscillator is showing a reading of 34, above the oversold trigger level of 30 which could foreshadow a correction.

Supplies Remained Unchanged

The EIA(Energy Information Administration) published that the average total supply of natural gas remained the same as in the previous report week, averaging 94.2 Bcf/d. Dry natural gas production declined by 1% compared with the previous report week. Average net imports from Canada rose by 8% from last week. Raised natural gas-fired power production drives rising demand. Total U.S. consumption of natural gas increased by 4% compared with the previous report week, according to data from the EIA. Natural gas consumption for power generation climbed by 10% week over week. Industrial sector consumption rose by 2% week over week. In the residential and commercial sectors, consumption decreased by 11%. Natural gas exports to Mexico rose by 1%.