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Natural Gas Price Analysis for February 23, 2018

By:
David Becker
Published: Feb 22, 2018, 18:11 UTC

Natural gas prices rebounded but were unable to break through Wednesday’s highs despite colder than normal weather which continues to spread across most

Natural Gas

Natural gas prices rebounded but were unable to break through Wednesday’s highs despite colder than normal weather which continues to spread across most of the western portion of the United States. The EIA released their inventory figures which showed a larger than expected draw but stocks remain within their 5-year average range.  A stronger than expected Markit manufacturing PMI also lifted natural gas prices.  Prices pushed through resistance now support near the 10-day moving average at 2.608.  Resistance is seen near the first Fibonacci retracement level of the move from the highs in January at 3.65 to the lows in February at 2.52, near 2.95. Momentum is turning as the MACD is poised to generate a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

The EIA reported that working gas in storage was 1,760 Bcf as of Friday, February 16, 2018. This represents a net decrease of 124 Bcf from the previous week. Expectations were for a decline in inventories of 121 Bcf. Stocks were 609 Bcf less than last year at this time and 412 Bcf below the five-year average of 2,172 Bcf. At 1,760 Bcf, total working gas is within the five-year historical range.

U.S. Markit manufacturing PMI rose

U.S. Markit manufacturing PMI rose 0.4 points to 55.9 in the flash February print. The January index also rose 0.4 points to 55.5. It was 54.2 last February. This is the best reading since October 2014. New orders increased to 57.8 from 56.8 and is the highest since September 2014. The services index jumped 2.6 points to 55.9, after dipping 0.4 points to 53.3 in January. It was 53.8 a year ago. This is the highest since August. The employment component rose to 54.4 from 53.4 and is the best since August as well. Prices charged were up to the highest since September 2014. The flash composite index climbed to 55.9, up 2.1 points, after sliding 0.3 points to 53.8 last month.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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