Natural gas prices tumbled 9% on Thursday following a much larger than expected build in natural gas inventories. Prices broke down hitting a 25-year low. This comes as Texas Governor Greg Abbott announced on Thursday that the state will pause any further reopening as the state continues to report record increases in Covid-19 cases and hospitalizations. Businesses that were permitted to open under the previous phases can continue to operate. This will mean less electricity demand in Texas one of the US’s largest states.
Natural gas prices broke down and are headed for 25-year lows which came in 1995 at 1.25. A close below those levels would lead to a test of the all-time lows which is 1.01. Resistance on natural gas prices is seen near the former breakdown level at 1.55. Momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.
Natural Gas Inventories Grow More than Expected
The EIA reported that gas in storage was 3,012 Bcf as of Friday, June 19, 2020. This represents a net increase of 120 Bcf from the previous week. Expectations were for a 85 Bcf build according to survey provider Estimize. Stocks were 739 Bcf higher than last year at this time and 466 Bcf above the five-year average of 2,546 Bcf. At 3,012 Bcf, total working gas is within the five-year historical range. The trajectory continues to point to more builds.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Natural Gas Price Prediction – Prices Tumble on Large Inventory Builds
- Oil Tries To Rebound After Yesterday’s Sell-Off
- USD/CAD Daily Forecast – Canadian Dollar Remains Under Pressure
- Crude Oil Price Forecast – Crude Oil Markets Quiet After Pullback
- NVIDIA Firing On All Cylinders After Pandemic Shutdowns
- Natural Gas Price Forecast – Natural Gas Markets Plunge After Bearish Inventory