Natural gas moved higher on Monday following last week’s rally. According to the National Oceanic Atmospheric Administration, warmer than normal weather is expected to cover most of the United States for the next 8-14 days. Residential and commercial demand fell due to mild weather.
Natural gas prices moved higher Monday following last week’s rally. Target resistance is seen near the February highs at 3.06. Short-term resistance is seen near an upward sloping trend line that comes in near 2.98. The 10-day moving average crossed above the 50-day moving average, which means that a medium-term uptrend is now in place. Short-term momentum has turned as the fast stochastic generated a crossover buy signal. Medium-term momentum is also positive as the MACD (moving average convergence divergence) histogram prints in positive territory with an upward sloping trajectory which points to higher prices.
Demand is Lower
Residential and commercial sector demand falls because of mild temperatures. Total U.S. consumption of natural gas fell by 5.9% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 1.5% week over week. Industrial sector consumption decreased by 3.0% week over week. In the residential and commercial sectors, consumption declined by 17.7% to 18 Bcf per day from 21.9 Bcf per day last week in response to seasonally rising temperatures across the Lower 48 states.