Natural gas prices rebound as rig count holds steady

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key ideas

  • Natural gas prices recovered on Friday.
  • The weather looks mixed.
  • Natural gas supplies have been declining over the past week.

On Friday, natural gas prices rose, ending the week on a positive note. The weather is expected to be mixed, colder in the north and northeast and warmer in the south and southeast. Natural gas supplies have dwindled over the past week, which has helped support prices. Natural gas rigs remained unchanged over the past week. Chicago PMI data showed manufacturing stagnating, which could weigh on prices.

The EIA reports that the US supply of natural gas fell slightly this week. The average total supply of natural gas decreased by 0.5% this week compared to the previous week. Dry natural gas production fell 0.5% and Canada’s average net imports remained stable compared to last week.

Technical analysis

Natural gas prices rebounded after closing down 5% on Thursday. Support is near the 20-day moving average at 6.6.7. Target resistance is seen near the April highs at 8.06.

The medium-term dynamic is negative. The MACD histogram prints in negative territory with a flat trajectory that indicates consolidation. The MACD (Moving Average Convergence Divergence) has generated a cross sell signal. The short-term momentum reversed and turned negative as the fast stochastic generated a cross sell signal.

The Rapid Stochastic continues to deteriorate sideways, generating sell and buy signals on consecutive days, indicating consolidation.

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