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Natural Gas Market Analysis

May natural gas prices have traded in a very narrow range during the overnight and early morning hours, but they have been able to hold above yesterday’s new contract low. The market showed a negative reaction to a relatively neutral EIA storage report yesterday. Weekly natural gas storage showed an injection of 25 bcf. Total storage stands at 2,512 bcf or 57.7% above the 5 year average. Over the last four weeks natural gas storage has increased 132 bcf. The report showed falling natural gas demand across most sectors in the recent week, with the exception of power generation, which was up nearly 8.0% on the week. Later in today’s session, the market will get the latest Baker Hughes rig count data, which is down nearly 30% from year ago levels. The price action continues to favor the bear camp until short term resistance at $1.988 comes out. Monthly support comes in at $1.85.

Technical Analysis

NATURAL GAS (JUN):  The market made a new contract low on the break. Momentum studies are declining, but have fallen to oversold levels. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The market is in a bearish position with the close below the 2nd swing support number. The next downside objective is now at 1.944. More downside action may be limited by the RSI under 20 putting the market in extremely oversold territory. The next area of resistance is around 2.025 and 2.073, while 1st support hits today at 1.961 and below there at 1.944.

 

StockMarketNews Research Team

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