Natural gas prices moved higher by close to 5% on Thursday, according to the Energy Department’s Inventory report. Hurricane Laura was downgraded to a Category 1 storm following a Category 4 hurricane that struck Lake Charles Louisiana. Installations in the Gulf of Mexico are without manpower, have stopped which reduced the production of the Gulf of Mexico by 45%. The weather in the Midwest is expected to be cooler than normal, which should increase the demand for heating.
Technical analysis
Natural gas prices moved higher after testing lower levels on Thursday. Goal resistance is seen near November 2018 at 2.90. Support is seen close to the 10-day moving average at 2.44. Short-term resistance has become positive, as the rapid stochastics generated a crossover buy signal. The current reading on the fast stochastic is 96 well above the overbought trigger level of 80, which could suggest a correction.
Natural gas storage rose Less than expected
Natural gas in storage was 3,420 Bcf as of Friday, August 21, 2020, according to the EIA. This represents a net increase of 45 Bcf from the previous week. Expectations were for a 50 Bcf building. Shares were 580 Bcf higher than last year at present and 438 Bcf above the five-year average of 2,982 Bcf. At 3,420 Bcf, total working gas is above the historic range of five years.
