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David Becker
Natural gas daily chart, June 12, 2019

Natural gas prices rebounded on Friday rising 2.75% and recapturing resinstance which was prior support. This follows Thursday’s smaller than expected build in natural gas inventories according to the Department of Energy. There are no hurricanes reported in the Altantic and the whether is expected to be mild over the next two weeks keeping cooling demand stable.

Technical Analysis

Natural gas prices rebounded climbing 2.75% and recapturing resistance which is now support seen near the 10-day moving average at 2.37. Target resistance is seen near the June highs at 2.43. Short term momentum is positive as the fast stochastic generated a crossover buy signal. The fast stochastic has moved from the oversold territory at 20, to 24, which reflects accelerating positive momentum. Medium term momentum is turning positive as the MACD (moving average convergence divergence) index is about to generate a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is moving higher but at a very slow trajectory which points to consolidation.


Inventories are Rising

The EIA reported that for the week ending June 7, working natural gas in underground storage totaled 2,088 billion cubic feet 9.9% lower than the five-year average for this week. Despite the relatively low levels of inventories, the average rate of net injections into storage is 44% higher than the five-year average so far in the refill season, which started in April this year. The injection season started at the lowest storage level since 2014, although storage levels are forecast to start the withdrawal season near the five-year average of 3,730 Bcf of working gas, with forecasts of above average net injections through October.

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