FXEMPIRE
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David Becker
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Natural gas prices whipsawed again on Thursday and tumbled 2.3%, following a smaller than expected draw in natural gas inventories. The weather is expected to be colder than normal in the US’s western portion over the next 2-weeks but warmer than normal in the mid-west and the east coast. The calendar is now moving into the end of the withdrawal season, and prices will likely remain rangebound unless there is another disruption or a cold spell.

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Technical Analysis

Natural gas prices whipsawed but moved lower and appear to be caught in a wide range. Resistance is seen near the 10-day moving average at 2.83. support is seen near the 50-day moving average at 2.72. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 16, below the oversold trigger level of 20 which foreshadows a correction. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.

 

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Inventories Decline Less than Expected

According to the EIA, natural gas in storage was 1,845 Bcf as of Friday, February 26, 2021. This represents a net decrease of 98 Bcf from the previous week. Expectations were for a 176 Bcf draw according to survey provider Estimize. Stocks were 277 Bcf less than last year at this time and 178 Bcf below the five-year average of 2,023 Bcf. At 1,845 Bcf, total working gas is within the five-year historical range.

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