Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
David Becker

Natural gas prices moved lower on Friday, dropping more than3% for the day and down 11% for the week. A larger than expected build in natural gas inventories, in conjunction with warmer than normal weather, has led prices lower. The weather over the next 8-14 days is expected to be warmer than normal according to the most recent report from the National Oceanic Atmospheric Administration.

Technical Analysis

Natural gas prices tumbled more than 11% this week, keeping pace with the drop in the equity markets. A decline in LNG exports is reducing demand in conjunction with warmer than normal weather. Target support is the 2016 lows at 1.61. A break of this level would be a fresh low on natural gas prices. Resistance is seen near the 10-week moving average at 1.95.

Weekly momentum is negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices. The fast stochastic generated a crossover sell signal in oversold territory. The current reading on the fast stochastic is 4.4, well below the oversold trigger level of 20 which could foreshadow a correction.

Th EIA reported that net withdrawal from storage totaled 143 Bcf for the week ending February 21, compared with the five-year average net withdrawal of 122 Bcf and last year’s net withdrawal of 167 Bcf during the same week. Working natural gas stocks totaled 2,200 Bcf, which is 179 Bcf more than the five-year average and 637 Bcf more than last year at this time. The average rate of withdrawal from storage is 9% lower than the five-year average so far in the withdrawal season. If the rate of withdrawal from storage matched the five-year average of 8.3 Bcf/d for the remainder of the withdrawal season, the total inventory would be 1,876 Bcf on March 31, which is 179 Bcf higher than the five-year average of 1,697 Bcf for that time of year.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.