Inventories declined by 19 Bcf
Natural gas prices moved lower on Thursday, declining slightly more than 2% following a smaller than expected draw in natural gas inventories. The weather is expected to be warmer than normal in the United States for the next 6-10 and 8-14 days according to the National Oceanic Atmospheric Administration. Oil prices rebounded on Thursday as oil executives in the US appear to be having conversations with Saudi Arabia on a potential global cut in oil output.
Natural gas prices moved lower on Thursday declining 2% and testing support near the continuation contract low of 1.51. Resistance on natural gas prices is seen near the 10-day moving average at 1.66. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 8, well below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.
The Energy Information Administration reported that working gas in storage was 1,986 Bcf as of Friday, March 27, 2020. This represents a net decrease of 19 Bcf from the previous week. Expectations were for a 24 Bcf draw according to survey provider Estimize. Stocks were 863 Bcf higher than last year at this time and 292 Bcf above the five-year average of 1,694 Bcf. At 1,986 Bcf, total working gas is within the five-year historical range.
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.