Natural Gas Prices Rise Ahead of Inventory Report

On Tuesday, natural gas prices continued to rise ahead of 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. Geopolitics continues to keep LNG exports elevated as natural gas prices in Europe remain high.

U.S. total natural gas supply declines slightly this week. According to the EIA, the average total supply of natural gas fell this report week by 0.6% compared with the previous report week. Dry natural gas production decreased by 0.5% compared with the last week’s report, and average net imports from Canada were essentially flat at 5.8 Bcf/d this week.

Technical Analysis

Natural gas prices moved higher on Tuesday. 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 83, 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 upward trajectory.