Natural gas prices rebounded sharply rising back above 2.57, following a smaller than expected draw in natural gas inventories. The weather forecast for the next 8-14 days is expected to be milder than normal on both the west and east coast which would reduce total natural gas demand. Over the next 6-10 days, the weather is expected to be colder than normal on the west coast and warmer than normal on the east coast which should temporarily increase both heating and cooling demand.
Natural gas prices whipsawed moving higher after tumbling on Wednesday. Prices are testing resistance which was former support which is an upward sloping trend line that connects the lows in April and the lows in May and come in near 2.57, which is seen as short term resistance. Support is seen near the May lows at 2.51. Short term momentum is negative as the fast stochastic continues to tumble. The current reading on the fast stochastic is 16, below the oversold trigger level of 20 which could foreshadow a correction. Medium term momentum is turning negative. The MACD (moving average convergence divergence) index is poised to generate a crossover sell signal.
The EIA Reports a Smaller than expected build in Inventories
The Department of Energy reported on Thursday that working gas in storage was 1,753 Bcf as of Friday, May 17, 2019. This represents a net increase of 100 Bcf from the previous week. Expectations according to Estimize were for a 107 Bcf gain in natural gas inventories. Stocks were 137 Bcf higher than last year at this time and 274 Bcf below the five-year average of 2,027 Bcf. At 1,753 Bcf, total working gas is within the five-year historical range.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Treasury Yield Inversion Indicates Investors Concerned About Growth
- NZD/USD Forex Technical Analysis – May 24, 2019 Forecast
- Gold Price Prediction – Gold Consolidates Despite Robust Jobs Data
- U.S. Dollar Index Futures (DX) Technical Analysis – Closing Price Reversal Top Confirmed
- Brexit, Elections and Economic Data Keep the GBP and USD in the Spot Light
- The Crypto Daily – The Movers and Shakers 24/05/19