UGAZ: NG Demand Rising. Positive Divergence?
Natural gas demand is rising due to electric power sector demand increase. Total U.S. consumption of natural gas rose by 3.9% compared with the previous report week. Natural gas consumed for power generation climbed by 10.1% week over week. In the residential and commercial sectors, consumption declined by 5.9%. Industrial sector consumption decreased by 0.3% week over week. Natural gas exports to Mexico increased 4.8%. (Data from EIA report, last week).
Technicals are showing a positive divergence between momentum and price; MACD is showing higher bottoms (coiling) while NG prices continue to consolidate. A potential for a break to the upside? Waiting for Thursday EIA report.
This week residential demand is continuing to rise because of hot weather. Industrial sector is also picking up due to reopening. Hurricane reduced production by 1 bcf, although produced delays with LNG exports. Fundamentals are turning bullish, although we are still oversupplied. May need another 2 weeks of growing demand to overcome high storage build.
Technicals are showing a positive divergence between momentum and price; MACD is showing higher bottoms (coiling) while NG prices continue to consolidate. A potential for a break to the upside? Waiting for Thursday EIA report.
This week residential demand is continuing to rise because of hot weather. Industrial sector is also picking up due to reopening. Hurricane reduced production by 1 bcf, although produced delays with LNG exports. Fundamentals are turning bullish, although we are still oversupplied. May need another 2 weeks of growing demand to overcome high storage build.