Natural Gas Prices Consolidate Following EIA Inventory Report

Key Insights

• Natural gas prices moved slightly higher.
• The weather is expected to be colder than usual.
• Inventories rose slightly more than expected.

Natural gas prices moved slightly higher on Thursday following the Department of Energy’s inventory report. LNG demand remains strong, and natural gas arrivals at LNG terminals continue to climb. Five of the past six days have been above 12.27 Bcf. The weather is expected to be colder than normal on the East coast and mid-West for the next 2-weeks.

According to EIA estimates, natural gas in storage was 1,450 Bcf as of Friday, April 15, 2022. This rise in stockpiles represents a net increase of 53 Bcf from the previous week. Expectations were for a 40 Bcf build. Stocks were 428 Bcf less than last year at this time and 292 Bcf below the five-year average of 1,742 Bcf. At 1,450 Bcf, the total working gas is within the five-year historical range.

Technical Analysis

Natural gas prices rose on Thursday but made a lower low. Short-term support is seen near the 10-day moving average at 6.91.   Additional support is at the top of the most recent range at the February highs at 5.57. Target resistance is seen near the April highs at 8.06.

Short-term momentum has reversed and turned negative as the fast stochastic generated a crossover sell signal. Prices have declined out of the overbought territory for both the fast stochastic and the relative strength index.

Medium-term momentum has turned positive but is decelerating. The MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation.