Natural Gas Price Analysis for May 29, 2017

Natural gas prices moved higher on Friday, bouncing off support levels and rebounding from Thursday’s decline following the larger than expected increase in natural gas inventories. The EIA reported a robust 75 Bcf increase in natural gas inventories keeping the level above the middle of the 5-year range.  With NOAA forecasting cooler than normal weather during the next 8-14 days, natural gas demand is likely to decline.

Momentum on Natural Gas is Negative

Support on natural gas prices are seen near an upward sloping trend line that comes in near 3.27, while resistance is seen near the 10-day moving average at 3.33.  Prices have formed a double top in April and May which is also could be viewed as the right shoulder to a head and shoulder pattern.  Momentum is negative as the MACD (moving average convergence divergence) index prints in the red with a downward sloping trajectory which points to lower prices.