Natural Gas Erases Gains, Falls 5 cents to $1.77 Amid Broader Declines in Stock Markets and Oil
Natural gas prices dropped nearly 3% on Friday as inventories built more than expected. Strong production despite continued declines in rig count,
has kept natural gas prices on their heels. The weather is expected to remain warmer than normal for most of the United States which should increase cooling demand.
Softer than expected Durable goods order likely reduced natural gas demand. Orders for durable goods, plunged 17.2% in April after dropping 16.6% in March.
Natural gas prices dropped on Thursday declining nearly 3% but bouncing near support which is an upward sloping trend line that comes in near 1.82.
A close below this level would likely see a decline to the June contract lows at 1.60. Resistance on natural gas is seen near the 10-day moving average of 1.89.
The 10-day moving average recently crossed below the 50-day moving average which means that a short term downtrend is now in place.
Short term momentum is negative as the fast stochastic generated a crossover sell signal. The current reading of the fast stochastic is 5, well below the oversold trigger level of 20 which could foreshadow a correction.