Natural Gas Prices Increase by Nearly 9% Ahead of the Inventory Report

Natural gas prices increased on Wednesday, ahead of the Department of Energy's Thursday inventory update. According to a poll conducted by crowdsourcing company Estimize, inventories are expected to increase by 36 Bcf. The weather is forecast to be mixed over the next two weeks, with chilly weather covering the northern states and warmer-than-average weather in the south.

Natural gas output in the United States continues to increase. According to the EIA, natural gas output in the United States climbed by 2% in 2021, reaching 118.8 billion cubic feet per day monthly in December 2021, the highest level on record. Appalachia, the Permian, and Haynesville all contributed to this surge, accounting for 59 percent of total withdrawals in 2021, up from 24 percent in 2011.

Technical Evaluation

On Wednesday, natural gas prices increased significantly. Prices breached resistance, which is now acting as support at the 10-day moving average of 7.05. Near the April highs of 8.06, the target resistance is visible. At 5.50, support is located at the 50-day moving average.

Momentum is negative but decelerating in the medium term. The MACD histogram is printing negative values with an upward trend, indicating consolidation. A crossover sell signal was generated by the MACD (moving average convergence divergence). The short-term momentum indicator has turned positive as a crossing buy signal was given by the fast stochastic.