The natural gas price fall to a 1-month low yesterday. Prices fell more than five percent due to a larger-than-expected increase in weekly EIA gas supplies. The EIA reported Thursday that natural gas inventories rose by +92 billion bcf for the week ended April 19, beating expectations of +86 billion bcf.
Natural gas has lost more than 7% over the last 4 weeks and 36.34% over the past 12. months.
The Natural Gas Price has recovered from their worst levels on expectations that warm weather in the US South could increase demand for natural gas from power suppliers to cover increased use of air conditioners. Maxar Technologies said Thursday that warming is expected for the central and southern regions from April 30 to May 4.
Prices fell earlier this year as an unusually mild winter curbed the use of natural gas heating and pushed inventories well above average.
Prices are also under pressure after the Freeport LNG nat-gas export terminal in Texas on March 1 shut down one of its three production units due to damage from extreme cold in Texas. The unit recently reopened on a partial basis. However, Freeport said that once the production unit is fully reopened, the other two units will be taken down for maintenance, and all three units will not return online until May. The lack of full capacity of the Freeport export terminal limits US nat-gas exports and boosts US nat-gas inventories.
Thursday’s weekly EIA report was bearish for NG prices since nat-gas inventories for the week ended April 19 rose by +92 bcf, more than expectations of +86 bcf and above the 5-year average build for this time of year of +86 bcf. As of April 19, NG inventories were up +20.7% y/y and were +37.0% above their 5-year seasonal average, signalling ample nat-gas supplies. In Europe, gas storage was 62% full as of April 22, above the 5-year seasonal average of 45% full for this time of year.
Technical Outlook – Natural Gas Price
From the technical front, the Natural gas price witnessed over 5% fall yesterday. Prices touched a low133.60 and settled at 134.90..
The long bearish candlestick on the chart above shows aggressive pressure. Furthermore, prices are trading near their multiple support at 128.00 and RSI is also giving a negative crossover.
However, prices should break below 128 to continue the decline towards 115.00 and 108.00. Otherwise, failure of the breakout could prove a moving recovery to 142-155.
Happy Trading!
Commodity Samachar
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