Natural Gas Technical Report for February 24, 2017

Natural gas prices surged higher but ran into resistance near the 2.70 level following a larger than expected draw in natural gas inventories reported by the Department of Energy.  Warmer than normal weather continues to be forecast to cover most of the United States which is expected to reduce heating demand.  Prices closed up on the day, consolidating the losses seen on Tuesday when natural gas fell 9.5%. Natural gas remains oversold with the relative strength index (RSI) printing a reading of 26, which is below the oversold trigger level of 30 and could foreshadow a correction.

Inventories Declined More than Expected

The EIA reported that working gas in storage was 2,356 Bcf as of Friday, February 17, 2017. This represents a net decrease of 89 Bcf from the previous week, compared to the 84 Bcf draw expected by analysts. Stocks were 261 Bcf less than last year at this time and 156 Bcf above the five-year average of 2,200 Bcf.