Natural gas prices broke out above short-term resistance and closed at a fresh contract high on Monday. Warmer than normal weather is expected to cover most of the West Coast and mid-West over the next 2-weeks. The weather on the East coast is expected to become milder. According to the National Oceanic Atmospheric Administration, there are no tropical storms in the Atlantic or Gulf of Mexico that are expected to become tropical cyclones over the next 48-hours. Production of Natural gas in the U.S. Increased week over week.
Natural gas prices moved higher on Monday and broke out above a short-term trend line. The August contract closed at an all-time high. Short-term resistance is seen near the July highs at 3.82. A break of this level could lead to a test of the 2018 highs at 4.92. Support is seen near the 10-day moving average at 3.67. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term negative momentum is decelerating. The MACD histogram is printing in negative territory with a rising trajectory which points to consolidation.
U.S. Production Rise
U.S. production increases 1.1% compared with last week. According to data from the EIA, the average total supply of natural gas rose by 1.1% compared with the previous report week. Dry natural gas production grew by 1.0% compared with the previous report week. Average net imports from Canada increased by 2.7% from last week.