Natural gas prices edged lower on Wednesday ahead of Thursday inventory report from the Department of Energy. Expectations are for a 46 Bcf build according to survey provider Estimize. The weather is expected to colder than normal in the eastern portion of the United States over the next 6-10 days and then the weather is expected to moderate. Supply rose in the latest week according to the EIA.
Natural gas prices edged lower on Wednesday, and continue to form a topping pattern. Prices will need to break out to new highs to keep the momentum going. Natural gas held support near the 10-day moving average at 3.27 on the December contract. Resistance is seen near the October highs at 3.36. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is neutral to positive as the MACD (moving average convergence divergence) histogram prints in the black with a flat trajectory which points to consolidation.
Supply Rose in the Latest Week
Supply rose in the latest week according to the EIA. The average total supply of natural gas rose by 2.3% compared with the previous report week. Dry natural gas production grew by 3.1% compared with the previous report week. Average net imports from Canada decreased by 12.9% from last week despite colder-than-normal temperatures across the Midwest and Great Plains. S&P Platts reports that cold weather in Western Canada and pipeline maintenance on the Westcoast Energy and Gas Transmission Northwest pipelines have reduced natural gas imports into the Pacific Northwest from Canada in recent days.
This article was originally posted on FX Empire