Natural Gas Prices Slide Following Inventory Report

Insight

Natural gas prices moved sideways following the Energy Department report on natural gas inventories. The decline is mostly due to the movement into a period of the year where demand declines.

According to survey provider Estimimze, expectations are for a 149 BCF draw in stockpiles. According to a report from NOAA, the weather in the U.S. is expected to be warmer than normal throughout most of the United States for the next 6-10 and 8-14 days.

According to EIA estimates, the natural storage was 1,519 Bcf as of Friday, March 4, 2022. This represents a net decrease of 124 Bcf from the previous week. Expectations were for a 124 Bcf draw, according to survey provider Estimize. Stocks were 281 Bcf less than last year at this time and 290 Bcf below the five-year average of 1,809 Bcf. At 1,519 Bcf, total working gas is within the five-year historical range.

Technical Analysis

Natural gas prices dropped on Thursday. Support is seen near the 200-day moving average at 4.34. Resistance is seen near the 10-day moving average at 4.64.

Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is above to turn negative. The MACD (moving average convergence divergence) index is making a crossover sell signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average, crosses below the 9-day moving average of the MACD line.