The weather is expected to remain warmer than normal
Natural gas prices declined on Thursday after rallying for 3-session following a larger than expected build in natural gas inventories. Warmer than normal weather is expected to cover most of the United States for the next 6-10 and 8-14 days according to the National Oceanic Atmospheric Administration. Currently, there are no tropical cyclones expected to form in the Atlantic for the next 48-hours, according to NOAA. Natural gas production was flat week over week.
Natural gas prices declined following a 3-day winning streak. Support is seen at the 50-day moving average at 2.78. Resistance is seen near the 10-day moving average at 2.97. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 22, up from 16, 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.
Natural gas in storage was 2,215 Bcf as of Friday, May 21, 2021, according to EIA estimates. This represents a net increase of 115 Bcf from the previous week. Expectations were for a 90 Bcf build according to survey provider Estimize. Stocks were 381 Bcf less than last year at this time and 63 Bcf below the five-year average of 2,278 Bcf. At 2,215 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.