Natural gas prices rose on Wednesday ahead of Thursday’s inventory report. According to survey provider Estimate, a decline of 125 Bcf for natural gas reserves is expected. Inventory declined by 143 bcf as against 158 bcf. According to the latest forecast by the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal over the next 6-10 and 8-14 days. Generally, there should be pressure on natural gas demand ahead of spring when demand falls.
Natural gas prices are on Wednesday in resistance near the 10-day moving average of 133. The prices remained high and higher which is a positive sign. Prices are in decline. Support is seen near February lows.
The short-term momentum has turned positive as the sharp stochastic has generated a crossover buy signal in the oversold region. Current readings of 38 show an acceleration from an oversold trigger level of 20. The RSI (Relative Strength Index) rebounded from an oversold region below 30 indicating positive momentum. The medium-term momentum has turned positive in the form of the MACD (moving average convergence deviation) index, generating a crossover buy signal. It occurs as a MACD line (12-day moving average minus 26-day moving average) above the MACD signal line (9-day moving average of MACD line)
Inventories are higher than last year
The EIA is to report the inventions in the last week of February. Total storage withdrawals occurred for the week ended 21 February at 143 Bcf last week, compared with a five-year average clearance of 122 Bcf during the same week and a net clearance of 167 Bcf last year. The working natural gas stock was 2,200 Bcf, which is 179 Bcf more than the five-year average this year and 637 Bcf more than last year.