Natural Gas Prices Rally Cold East Coast Weather

On Tuesday, natural gas prices continued to rise. According to a recent National Oceanic Atmospheric Administration report, much colder than normal weather is expected to cover most of the Mid-West and North East, and warmer than average weather will cover most of the West Coast for the next 8-14 days. Production increased in the latest week as a result of imports from Canada.

Technical Analysis

On Tuesday, natural gas prices rallied, 1%. Support is seen near the 50-day moving average at 4.30. Resistance is seen near the January highs at 4.50. The 10-day moving average crossed above the 200-day moving average which means that a short-term uptrend is now in place. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Supplies Rose in the Latest Week

U.S. total natural gas supply increases week over week as a result of higher net imports from Canada. According to data from the EIA, the average total supply of natural gas rose by 0.7%  from a week ago. Dry natural gas production decreased by 0.6% from the previous report week, but average net imports from Canada more than offset this decline by increasing 25.1% from last week.