Natural gas prices rose on Thursday despite a larger than expected increase in natural gas inventories reported by the Energy Information Administration. Tropical Storm Josephine has formed in the Atlantic but is not expected to move toward the Gulf of Mexico and therefore should not hit any natural gas infrastructure. There is a second disturbance off the coast of North Carolina with a 20% chance of forming a tropical cyclone according to NOAA. The weather is expected to be cooling than normal on the east coast and warmer than normal on the west coast according to a report from NOAA.
Natural gas prices moved higher on Thursday, bouncing near support at the 10-day moving average at 2.13. Resistance is seen near a downward sloping trend line that comes in near 2.26. Short-term momentum is neutral as the fast stochastic moves sideways printing a reading of 79, just below the overbought trigger level of 80. Medium-term momentum is also neutral as the MACD (moving average convergence divergence) histogram prints in the black with a flat trajectory which points to consolidation.
Natural Gas Inventories Rise more than Expected
Natural gas in storage was 3,332 Bcf as of Friday, August 7, 2020, according to the EIA. This represents a net increase of 58 Bcf from the previous week. Expectations were for a 40 Bcf build according to survey provider Estimize. Stocks were 608 Bcf higher than last year at this time and 443 Bcf above the five-year average of 2,889 Bcf. At 3,332 Bcf, total working gas is above the five-year historical range.
This article was originally posted on FX Empire
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