Natural gas prices moved lower on Wednesday, dropping slightly more than 1% . A chain of storms is moving across the Atlantic, which should continue to bring on natural gas volatility. The weather is expected to be warmer than normal over the next 8-14 days increasing cooling demand. The volume of managed money that is short futures and options far outnumbers the volume that is long, which is likely to lead to additional buying. Traders await Thursday’s inventory report from the Department of Energy. Expectations are for an 85 Bcf draw according to Estimize.
Natural gas prices moved lower on Wednesday as short-covering was curtailed. Prices are now poised to test support near the 10-day moving average at 2.43. Resistance is seen near the September highs at 2.69. Momentum is positive as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory which points to higher prices. The fast stochastic has turned lower and made a crossover in overbought territory. Its currently printing a reading of 81, which is just above the overbought trigger level of 80 which could foreshadow a correction.
EIA is Poised Release Inventory Information
Traders await Thursday’s inventory report from the Department of Energy. Expectations are for an 85 Bcf draw according to Estimize. Net injections into storage totaled 84 Bcf for the week ending August 30, compared with the five-year average net injections of 66 Bcf and last year’s net injections of 64 Bcf during the same week. Working gas stocks totaled 2,941 Bcf, which is 82 Bcf lower than the five-year average and 383 Bcf more than last year at this time.
This article was originally posted on FX Empire
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