Natural gas prices rebounded to close in the black after hitting new lows for the week. Demand could be mixed as the reclosing of some states in the US will ease demand and this will be offset by warmer normal weather which should buoy cooling demand. The only tropical cyclone activity is tropical storm Faye which is rising the east coast but is unlikely to generate any damage to natural gas infrastructure. The number of active rigs declined by 4 this week, with natural gas account for 2 and oil accounting for a decline of 2. Natural gas is one of the main sources of energy in the United States in 2019 according to the EIA.
Natural gas prices reversed its downward trajectory and rose for the session bouncing off support near the 10-day moving average at 1.77. Resistance is seen near the 50-day moving average at 1.90. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum also remains positive as the MACD (moving average convergence divergence) index prints in the black with a slowing trajectory which points to consolidation.
Production and Consumption in 2020 Hit Record in the US
In 2019, U.S. production of natural gas increased to almost 34 trillion cubic feet and consumption increased to 31 Tcf, both values were records. The magnitude of U.S. natural gas supply production, imports, and withdrawals from storage and disposition consumption, exports, and additions to storage were records in 2019.
This article was originally posted on FX Empire