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David Becker
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Natural gas prices moved higher on Thursday rising near 5%, following the Energy Department Inventory report. Hurricane Laura has been downgraded to a category 1 storm after making landfall as a category 4 hurricane, which landed near Lake Charles Louisiana. Installations in the Gulf of Mexico are without manpower, having been halted which reduced the Gulf of Mexico production by 45%. The weather in the mid-west is expected to be cooler than normal which should increase heating demand.

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Technical Analysis

Natural gas prices moved higher after testing lower levels on Thursday. Target resistance is seen near the November 2018 highs at 2.90. Support is seen near the 10-day moving average at 2.44. Short term resistance has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 96 well above the overbought trigger level of 80, which could foreshadow a correction.

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Natural Gas Storage Rose Less than Expected

Natural gas in storage was 3,420 Bcf as of Friday, August 21, 2020, according to the EIA. This represents a net increase of 45 Bcf from the previous week. Expectations were for a 50 Bcf build. Stocks were 580 Bcf higher than last year at this time and 438 Bcf above the five-year average of 2,982 Bcf. At 3,420 Bcf, total working gas is above the five-year historical range.

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