Natural Gas Tumbles Despite Robust Inventory 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.
Inventories Decline More than Expected
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.