Natural gas continues its rally today after the Energy Information Administration (EIA) released their weekly supply data showed reserves increasing by 35 billion cubic feet in the week ended on November first. This was lower then the increase of 40 billion cubic feet expected by analysts and was lower than the 38 billion cubic feet reported last week.
Data showed that natural gas stockpiles now stand at 3.814 trillion cubic feet, which is down 112 billion cubic feet from a year ago. However, the EIA report showed that stockpiles are higher than the five-year average.
Natural gas is also receiving some support as colder than normal temperatures move into high demand areas, like the Northeast and Midwestern part of the United States.
Price action has shot up to but rejected at the 200 EMA on the 4H chart. It will be important for Natural gas to close above the descending trend line to retest and close above $3.621. An upside to $3.65 per billion British Thermal Unites (BTUs) is possible short-term and should continue to roll higher as long as inventories and weather forecasts remain encouraging.
Currently, natural gas futures are sinking lower, and dynamic support is to be found at the 20 EMA. $3.5 per BTU the next support level. Natural gas is still up .94 percent on the day/