Natural gas prices rebounded from session lows initially falling to 2.15, but still falling 3.7% on the day. This comes following a larger than expected draw in natural gas inventories which was reported by the Department of Energy one day late due to the Christmas Holiday. The weather is expected to be warmer than normal during the next 6-10 days and then turn to move normal levels during the next 8-14 days according to the National Oceanic Atmospheric Administration.
Natural gas prices rebounded sharply but still fell nearly 4% on the session. Resistance is seen near the 10-day moving average at 2.27 which coincides to the most recent breakdown level. Support is seen near the December lows at 2.15, which coincides with the monthly lows. Momentum is neutral to negative. The MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram prints in the red with a flat trajectory which points to consolidation.
Inventories Fall More than Expected
Natural gas stockpiles in storage was 3,250 Bcf as of Friday, December 20, 2019, according to EIA estimates. This represents a net decrease of 161 Bcf from the previous week. Expectations were for a 119 Bcf decline according to survey provider Estimize. Stocks were 518 Bcf higher than last year at this time and 69 Bcf below the five-year average of 3,319 Bcf. At 3,250 Bcf, total working gas is within the five-year historical range.
This article was originally posted on FX Empire
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