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Natural Gas Consolidates Despite Continue Inventory Withdrawals

By:
David Becker
Published: Apr 23, 2018, 19:29 UTC

Natural gas prices moved sideways on Monday and remain in the middle of a range centered around the 10-day moving average at 2.71, which is short-term

Natural Gas Consolidates Despite Continue Inventory Withdrawals

Natural gas prices moved sideways on Monday and remain in the middle of a range centered around the 10-day moving average at 2.71, which is short-term support. Resistance is seen near a downward sloping trend line at 2.80. Support is seen near an upward sloping trend line at 2.60. Momentum is flat as the MACD (moving average convergence divergence) histogram prints near the zero-index level with a flat trajectory which reflects consolidation.

Gas in Storage Continues to Slide

Working gas storage continues to post net withdrawals for the second week of the refill season. Net withdrawals from storage totaled 36 Bcf for the week ending April 13, compared with the five-year average net injections of 38 Bcf and last year’s net injections of 47 Bcf during the same week. The natural gas storage refill season typically begins on April 1. However, continued colder-than-normal temperatures throughout most of the Lower 48 states have resulted in continued withdrawals from storage. This week’s report marks the second week in a row and fifth time since 2010 that net withdrawals from storage on a national level were reported during April. Working gas stocks totaled 1,299 Bcf, which is 449 Bcf lower than the five-year average and 808 Bcf lower than last year at this time.

Colder-than-normal temperatures drive withdrawals in the Midwest, East, and South Central regions. Working gas stocks in the East, Midwest, and South Central regions posted net withdrawals on the week, in contrast to average net injections typically reported for the storage week in the month of April. Net withdrawals totaled 10 Bcf and 18 Bcf in the Midwest and East regions, respectively, compared with the five-year average net injections of 6 Bcf and 5 Bcf in these regions. In the South Central region, the weekly net draw totaled 12 Bcf compared with the five-year average weekly net build of 22 Bcf.

U.S. Chicago Fed national activity index fell 0.88 points

U.S. Chicago Fed national activity index fell 0.88 points to 0.10 in March after climbing 1.24 points to 0.98 which was revised from 0.88, with January revised to -0.26 from 0.02. That brought the 3-month average to 0.27 from 0.31 which was revised from 0.37, while January’s average dipped to 0.11 (revised from 0.16). The negative print on January was the first such since August. The report showed 44 of the 85 indicators made positive contributions, with 41 making negative contributions. The slippage isn’t a big surprise given all the angst and after coming off of the highest level since late 1999.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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