Natural gas prices fell nearly 3% on Friday as inventions produced more than expected. Strong production has kept natural gas prices on their heels despite the continued decline in rig count. Weather is expected to remain warmer than normal in most parts of the United States. The prospect of more durable goods orders than expected reduces the demand for natural gas. Orders for durable goods fell 17.2% in April after dropping 16.6% in March.
Natural gas prices fell by about 3% on Thursday but are bouncing near the support, which is an upward tilted trend line approaching 137. Below this level, there is a possibility that the June contract will see a fall of 125. Resistance to natural gas is seen near the 10-day moving average of 137. The 10-day moving average has recently gone below the 50-day moving average, meaning that a short-term downtrend is now in place. The short-term speed is negative because the fast stochastic produced a crossover cell signal. The current reading of the fast stochastic is 5, which is below an oversold trigger level of 20 that can precipitate a correction.
Inventory grew more than expected.
According to the EIA, as of Friday, May 22, 2020, natural gas in storage was 2,612 bcf. This represents a net increase of 109 Bcf from the previous week. According to the survey provider Estimate, there were expectations for 107 BCF construction. The stock was 778 bcf higher than last year at this time and 423 bcf above the five-year average of 2,189 bcf. At 2,612 BCF, the total working gas is within the five-year historical range