Natural Gas futures saw volatile trade on Friday after the market responded to reports of a lightning strike at gas compressor station in Mississippi which affected gas flows from the location.
The lead month June contract briefly traded above 2.500 early in the session but seller emerged on the price spike sending the market well off session highs as U.S. gas supplies remain ample.
In its Weekly Gas Storage Report last Thursday, the U.S. Energy Information Administration (EIA) said 79 billion cubic feet of gas (Bcf) went into storage during the week of April 21, above a consensus for a 75 Bcf increase. During the same week last year, gas storage levels rose by only 42 Bcf.
U.S. natural gas in storage now totals 2.009 trillion cubic feet, now 35.3% above last year and 22.2% above the five-year average.
U.S. weather forecasts now show a mixed picture for regional natural gas demand. The Climate Prediction Center’s 6-to-10 and 8-to-14 day forecast now predicts normal to above-normal temperatures for most areas west of the Mississippi River with the exception of the far Southwest and California with below-normal temperatures seen for areas east of the Mississippi River.
In addition to U.S. natural gas storage levels being well above average, a mild winter over much of Europe and energy conservation efforts has led to gas storage levels being 55% full as of April 1, which is the highest level on record for the end of the European winter heating season according to Gas Storage Europe’s Aggregated Gas Storage Inventory (AGSI).
Europe’s gas storage as of March 31 totaled 2.02 trillion cubic feet (Tcf), which is well above the five-year average of 1.21 Tcf.
Technicals
Looking at the daily chart for the June 2023 Natural Gas futures (NGM23), we notice prices starting to level out after a steep downtrend that began in December.
We did see buying interest emerge once prices briefly fell below $2.25 in the June contract but selling interest continues to emerge once prices approach the 50-day moving average (yellow).
The 14-day RSI continues to hold just below 50, with a current reading of 47.34.
Support is seen at the April 14 low of 2.143, with resistance seen at the 50-day moving average (yellow) currently near the 2.603 price level.
Oil future one day continuation chart
Contract Specifications
June 2023 Natural Gas Futures (NGM23)
Trading Calendar
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