Natural gas prices rose 3.5% on Thursday after less-than-expected accumulation in natural gas inventories. Strong-than-expected US employment data helped lift natural gas. With several states curtailing their reopening efforts, electricity demand is likely to remain subdued as few commercial buildings are likely to rise again during this period.
Technical analysis
Natural gas prices rose 3.5%, but were unable to overcome the resistance of the trend line approaching 1.74. Support looks close to the 10-day moving average at 1.68. The short-term momentum has turned positive when the fast stochastic generated a cross buy signal. Medium-term momentum has also turned positive when the MACD (Moving Average Divergence Convergence) index generated a cross buy signal. This occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printed in black with an upward sloping path that points to higher prices.
Natural gas inventories increase less than expected
The stored natural gas was 3,077 Bcf as of Friday, June 26, 2020, according to the Energy Information Administration. This represents a net increase of 65 Bcf compared to the previous week. Expectations were for a 75 Bcf construction according to survey provider Estimize. Stocks were 712 Bcf higher than last year at this time and 466 Bcf above the five-year average of 2,611 Bcf. At 3,077 Bcf, total working gas is within the five year historical range.
