Higher natural gas price differential from cold weather forecast

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On Monday, natural gas prices rose nearly 5% after climbing 5% last week. According to a recent report from the National Oceanic Atmospheric Administration, cool weather is expected to cover most of the Midwest and Northeast over the next 8 to 14 days. Once the weather forecast stays cooler than normal, prices have finally regained key resistances and should remain supported.

Technical analysis

On Monday, natural gas prices rose and closed slightly below the open. Support is near the 200 day moving average at 4.02. Resistance is seen near the 50 day moving average at 3.84 which coincides with a descending trendline. Short-term momentum is positive as the Rapid Stochastic has generated a cross buy signal. Medium-term momentum is positive as the MACD (Moving Average Convergence Divergence) histogram prints in positive territory with an upward sloping path that indicates higher prices.

US consumption is higher

US consumption of natural gas increased significantly over the past week. Consumption in the residential and commercial sectors in the United States increased 21.8%, as the National Oceanic and Atmospheric Administration reported widespread below-average temperatures in the central and western United States. As a result, total consumption of natural gas in the United States increased 13.3% week over week.

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