Natural Gas Price Analysis for January 5, 2018

Natural gas prices tumbled more than 4% following a smaller than expected draw in natural gas inventories reported on Thursday by the Department of Energy. The weather is expected to move to a more normal level over the next 8-14 days which is keeping prices capped.  Support is seen near the 10-day moving average at 2.81.  Resistance is seen near a downward sloping trend line that comes in near 3.12. Positive momentum is decelerating as the MACD histogram prints in the black with a declining trajectory which points to consolidation.

Inventories Drew Less Than Expected

The EIA reported that working gas in storage was 3,126 Bcf as of Friday, December 29, 2017. This represents a net decrease of 206 Bcf from the previous week, compared to expectations of a 210 Bcf draw. Stocks were 192 Bcf less than last year at this time and 192 Bcf below the five-year average of 3,318 Bcf. At 3,126 Bcf, total working gas is within the five-year historical range.