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 Ocean, but is not expected to move to the Gulf of Mexico and therefore should not hit 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 cooler then normal on the east coast and warmer than normal on the west coast, according to a report by NOAA.
Technical analysis
Prices for natural gas moved higher on Thursday, and tied close to support at the 10-day moving average at 2.13. Resistance is seen near a downward trending line that comes close to 2.26. Short-term momentum is neutral, as the rapid stochastic moves sideways and pushes a reading of 79, just below the overbought trigger level of 80. Medium-term momentum is also neutral as the MACD (historical moving average convergence divergence) in the black prints with a flat trajectory indicating consolidation.
Natural gas inventories rose 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 build of 40 Bcf according to research provider Estimize. Shares were 608 Bcf higher than last year at present and 443 Bcf above the five-year average of 2,889 Bcf. At 3,332 Bcf, total working gas is above the historical range of five years.
