Natural Gas Prices Rallied on Declining Inventories
Natural gas prices moved higher but finished off the session highs. Geopolitical concerns continue to buoy gas prices as LNG exports accelerate higher. A larger than expected decline in natural gas inventories put upward pressure on prices.
The weather is expected to be colder than normal in the mid-West and East Coast over the next 6-10 days, but the weather is expected to become milder. A warm front will cover most of the mid-West through the South East and the West. Geopolitics are also generating volatility.
Natural gas prices moved higher but were well off the highs of the day. Support near the 10-day moving average at 4.31. Resistance is seen near the February highs at 4.86. Prices look like they are forming a small head and shoulder pattern.
Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has also turned positive. The MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.
According to EIA estimates, natural gas in storage was 1,782 Bcf as of Friday, February 18, 2022. This represents a net decrease of 129 Bcf from the previous week. Natural Gas Intelligence, the median forecasting NGI model is for a decline of 121 Bcf. Stocks were 209 Bcf less than last year at this time and 214 Bcf below the five-year average of 1,996 Bcf. At 1,782 Bcf, total working gas is within the five-year historical range.