Natural gas prices fell on Thursday following a report from the Department of Energy on reserves. The weather is expected to be colder in the western part of the United States and warmer in the east in the next two weeks.
This should increase heat demand in the West, and lead to fluctuations in natural gas prices. Since the natural gas deal is in Louisiana, the effects of the cold western weather are unlikely to be felt. If the weather moves from east to midwest, prices will be affected.
Technical analysis
Natural gas prices fell on Thursday but bounced back from lower session prices. Support is seen near the 50-day moving average of 2.67 and then the 10-day moving average of 2.63. Resistance is seen near the January high of 2.90.
The medium-term momentum is positive as the MACD (Average Convergence Turnover) Index has recently produced a crossover signal.
This occurs when the MACD line (12-day moving average, negative 26-day moving average) goes above the MACD signal line (9-day moving average of the MACD line). Reflecting the expected positive momentum, the RSI topped the list.
Inventories are lower than expected
According to EIA estimates, the natural gas in storage was 2,881. This represents a net decrease of 128 Bcf over the previous week
Expectawere raised to 147 BCF, according to the estimating survey provider. At the time, the stock was 78 BCF higher than last year and 244 BCF higher than the five-year average of 2,637 BCF. At 2,881 Bcf, the total working gas is in the five-year historical range.
