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David Becker
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Natural gas prices took a respite following three consecutive higher trading session that grossed the May contract 7.3%. Prices were down on the new June contract by 1.7%.  According to the National Oceanic Atmospheric Administration, warmer than normal weather is expectred to cover most of the United States for the next 8-14 days. This warmer than normal weather is likely to induce additional cooling demand.

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Technical Analysis

Natural gas prices moved lower on Thursday down nearly 1.7% following a 7% rise on Monday through Wednesday. Target resistance is seen near the February highs at 3.06. The 10-day moving average crossed above the 50-day moving average, which means that a medium-term uptrend is now in place. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is also positive as the MACD (moving average convergence divergence) histogram prints in positive territory with an upward sloping trajectory which points to higher prices.

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Inventories Rose Less than Expected

Natural gas in storage was 1,898 Bcf as of Friday, April 23, 2021, according to the EIA. This represents a net increase of 15 Bcf from the previous week. Expectations were for a 24 Bcf build, according to survey provider Estimize. Stocks were 302 Bcf less than last year at this time and 40 Bcf below the five-year average of 1,938 Bcf. At 1,898 Bcf, total working gas is within the five-year historical range.

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