Natural Gas Prices Surged Ahead of Inventory Report

Key Insights

• Natural gas prices hit a 13-year high.
• The weather is expected to be mixed.
• Net Inventions to stockpiles are expected to rise.

On Tuesday, natural gas prices surged higher, hitting fresh 13-year highs. The weather is expected to be mixed, colder on the West Coast and warmer on the East Coast for the next 2-weeks. Natural gas inventories are expected to rise.

Last week, the net injections into storage totaled 40 Bcf for the week ending April 22, compared with the five-year average net injections of 53 Bcf and last year’s net injections of 18 Bcf during the same week. Working natural gas stocks totaled 1,490 Bcf, which is 305 Bcf lower than the five-year average and 406 Bcf lower than last year at this time.

Technical Analysis

On Monday, natural gas prices rose higher, hitting a new 13-year intra-day high. Support is seen near the 20-day moving average at 5.7. Target resistance is seen near the June 2013 highs at 13.60.

Medium-term momentum has turned positive. The MACD (moving average convergence divergence) generated a crossover buy signal. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal.