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David Becker
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Natural gas daily chart, August 07, 2019

Natural gas prices rebounded on Thursday rising more than 2% following a smaller than expected build in natural gas inventories which was reported by the Energy Information Administration on Thursday. There are no tropical cyclones expected to form in the Atlantic or Gulf of Mexico over the next 48-hours according to the National Oceanic Atmospheric Administration (NOAA). Additional, NOAA expects the weather in the US to be cooler than normal over the next 8-14 days which should reduce cooling demand during the height of the summer.

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Technical Analysis

Natural gas prices rebounded on Thursday rising to resistance near the 10-day moving average at 2.14. Support on natural gas is seen near the August lows at 2.03. Short term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. Prices have moved up from oversold territory and are now printing a reading of 34, above the oversold trigger level of 20. Medium-term momentum is neutral. The MACD (moving average convergence divergence) histogram is printing in the red with a flat trajectory which points to consolidation.

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Natural Gas Inventories Rise Less than Expected

The US Department of Energy reported that working gas in storage was 2,689 Bcf as of Friday, August 2, 2019. This represents a net increase of 55 Bcf from the previous week. Expectations were for a 65 Bcf build in natural gas stockpiles according to Estimize. Stocks were 343 Bcf higher than last year at this time and 111 Bcf below the five-year average of 2,800 Bcf. At 2,689 Bcf, the total working gas is within the five-year historical range.

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