Expectations were for a 173 Bcf draw
Natural gas prices tumbled on Thursday, declining another 5.7% in the wake of Wednesday’s huge losses. Despite a larger than expected draw in natural gas inventories, the move in prices came. According to a recent National Oceanic Atmospheric Administration report, much colder than normal weather is expected to cover most of the Mid-West and North East, and warmer than average weather will cover most of the West Coast for the next 8-14 days.
On Thursday, natural gas prices tumbled 5.7%, and is now down 11% for the week. Resistant is seen near the 200-day moving average at 4.07. Support is seen near the December lows at 3.53. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Prices are oversold as the fast stochastic is printing a reading of 17, below the oversold trigger level of 20. Medium-term momentum is positive but decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation.
According to EIA estimates, natural gas in storage was 2,810 Bcf as of Friday, January 14, 2022. This decline in stockpiles represents a net decrease of 206 Bcf from the previous week. Expectations were for a 173 Bcf draw in inventories according to survey provider Estiminze. Stocks were 226 Bcf less than last year at this time and 33 Bcf above the five-year average of 2,777 Bcf. At 2,810 Bcf, the total working gas is within the five-year historical range.
David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.