Natural gas prices were nearly unchanged on Tuesday following Monday’s slide. Support is seen near the January lows at 2.41. Resistance is seen near the 50-day moving average at 2.75. The 10-day moving average crossed below the 50-day moving average which shows that a short-term down trend is now in place. Short term momentum is negative but prices are oversold. The fast stochastic is printing a reading of 4.6, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.
US Production Declined in February
EIA forecasts that U.S. production of dry natural gas averaged 87.8 Bcf per day in February, which is down from 92.4 Bcf per day in December. The decline in natural gas production was mostly a result of freeze-offs, which occur when water and other liquids in the raw natural gas stream freeze at the wellhead or in natural gas gathering lines near-production activities.
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