Natural gas prices broke out above trend line resistance and are poised to test higher levels. With tropical storm Marco and tropical storm Laura baring down on Loiusinana’s Port Author, approximately 45% of the natural gas in the Gulf of Mexico could be taken offline. Tropical Storm Laura is expected to be a Hurricane category 2, by the time it makes landfall during the middle of the week, which could create a significant impact. The weather is expected to be warmer than normal throughout west and southwest over the next 2-weeks which could generate additional cooling demand.
Natural gas prices broke out above trend line resistance are poised to test higher levels. Resistance is seen near the November 2018 highs at 2.90. Support is seen near the recent breakout level at 2.45 and then again at the 10-day moving average at 2.34. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
Supply is Down in the Latest Week
Supply is down slightly according to data from the EIA. The average total supply of natural gas fell by 0.2% compared with the previous report week. Dry natural gas production decreased by 0.1% compared with the previous report week. The average net imports from Canada decreased by 1.2% from last week.