Natural gas prices broke out and continue to trend higher on Friday. For the session, natural gas prices were up nearly 8% and rose approximately 5.3% for the week. There is one tropical storm brewing in the Atlantic but it is not expected to disturb and natural gas infrastructure. There is also a disturbance in the Atlantic close to the North Carolina coast with a 40% chance of becoming a tropical storm. The weather is expected to be cooler than normal in the east and warmer than normal in the west for the next two weeks according to NOAA. The demand for natural gas rose last week due to the power sector.
Technical Analysis
Natural gas prices broke out on Friday rising nearly 8%. The technical break out has prices poised to test the May highs near 2.50. Support on natural gas is seen near the 10-day moving average at 2.19. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 97, well above the overbought trigger level of 80 which could foreshadow a correction.
Demand Rises
Demand rises slightly with gains in the power sector. Total U.S. consumption of natural gas rose by 0.5% compared with the previous report week, according to data from the EIA. Feedgas to liquefied natural gas terminals were the largest contributor to rising consumption this week, increasing 14% and rising from an average of 3.8 Bcf last week to 4.4 Bcf this week. Natural gas consumed for power generation climbed by 0.9% week over week.
article was originally posted on FX Empire” data-reactid=”28″>This article was originally posted on FX Empire
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