Natural Gas Prices Rise Following Inventory Report

Key Insights

• Natural Gas prices continue to rally
• Inventories dropped in line with expectations
• The weather is expected to remain cool

Natural gas prices rallied on Thursday following the Department of Energy’s report on stockpiles. The weather forecast shows mixed weather across the West Coast and Cooler than normal weather across the East Coast during the next 6-10 days. LNG exports were stable in the latest week.

Natural gas in storage was 1,389 Bcf as of Friday, March 18, 2022, according to the EIA estimates. This represents a net decrease of 51 Bcf from the previous week. Stocks were 366 Bcf less than last year at this time and 293 Bcf below the five-year average of 1,682 Bcf. At 1,389 Bcf, total working gas is within the five-year historical range.

Technical Analysis

Natural gas prices rose on Thursday moving above former resistance, which is now supported near a downward sloping trend line near 5.15. Resistance is seen near the February highs at 5.57.

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 89, above the overbought trigger level of 80. Medium-term momentum has turned positive. The MACD (moving average convergence divergence) index is making a crossover buy signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average, crosses above the 9-day moving average of the MACD line.