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Natural Gas Prices Consolidate Despite Sizeable Inventory Draw

By:
David Becker
Published: Mar 3, 2022, 20:13 UTC

Expectations were for a 91 Bcf draw according to NGI

Natural Gas Prices Consolidate Despite Sizeable Inventory Draw

On Thursday natural gas prices edged lower following Thursday’s inventory report from the Department of Energy. The weather is now expected to be colder than average throughout most of the West Coast and the mid-West for the next 2-weeks. The east coast is expected to be warmer than normal. LNG output remains strong as geopolitics linger.

Natural gas in storage was 1,643 Bcf as of Friday, February 25, 2022, according to EIA estimates. This represents a net decrease of 139 Bcf from the previous week. Expectations were for a 91 Bcf decline according to NGI Estimates. Stocks were 216 Bcf less than last year at this time and 255 Bcf below the five-year average of 1,898 Bcf. At 1,643 Bcf, the total working gas is within the five-year historical range.

Technical Analysis

Natural gas prices moved sideways on Thursday. Support near the 200-day moving average at 4.30. Resistance is seen near the February highs at 4.94.

Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought with the fast stochastic printing a reading of 80, above the overbought trigger level of 80. Medium-term momentum is flat and edging higher. The MACD (moving average convergence divergence) index is printing in positive territory with a flat to an upward trajectory.

About the Author

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.

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