Natural Gas Slips but Closes Higher for the Week

Natural gas prices moved lower on Friday. Natural gas prices in Europe continue to remain elevated and higher LNG exports will lead to stronger demand. The EIA announced a larger than expected decline in natural gas inventories put upward pressure on prices on Thursday. Natural gas finished in the black for the week but well off the highs.

The weather is expected to be colder than average in the mid-West West coast and warmer on the
East coast over the next 8-14 days. Warm weather will dominate the U.S. over the next 6-10 days.

Technical Analysis

Natural gas prices moved lower on Friday, easing into the end of the week. Support near the 10-day moving average at 4.43. Resistance is seen near the February highs at 4.86. Prices look like they are forming a small head and shoulder pattern.

Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has also turned positive. The MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in positive territory with a flat trajectory that reflects consolidation.

Supply Drop

U.S. total natural gas supply declines slightly this week. According to data the EIA, the average total supply of natural gas fell this report week by 0.6% compared with the previous report week. Dry natural gas production decreased by 0.5% compared with the last week’s report, and average net imports from Canada were essentially flat at 5.8 Bcf per day this week.