Natural Gas Price Prediction – Natural Gas Rises Following In Line Inventory Build

Natural gas prices moved higher on Thursday, after testing lower levels.  The fluctuation came following an in-line natural gas inventory report revealed Thursday by the Department of Energy.  The range of injections were from 43 Bcf by Estimize to 49 Bcf by Reuters. Warmer than normal weather is expected to cover most of the United States for the next 8-14 days. The movement of warm weather is coming east to west pushing the warmer than normal weather in the mid-atlantic west.

Technicals

The trend continues to point to higher natural gas prices. Support is seen near the 50-day moving average at 2.85. Resistance is seen near the June highs at 3.05. Momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices. The RSI (relative strength index ) which is a momentum oscillator stabilized, moving sideways but the uptrend remain in place reflecting positive momentum.

Storage Came out In Line with Expectations

According to the Department of Energy, working gas in storage was 2,354 Bcf as of Friday, August 3, 2018. This represents a net increase of 46 Bcf from the previous week. Expectations were for an increase in that area. Stocks were 671 Bcf less than last year at this time and 572 Bcf below the five-year average of 2,926 Bcf. At 2,354 Bcf, total working gas is below the five-year historical range.

Producer Prices Were Flat in July

Inflation was softer than expected according to the producer price index released on Thursday by the Labor Department. The BLS reported that PPI was unchanged for final demand which followed a 0.3% increase in June. Year over year PPI advanced 3.3%, slowing after June’s 3.4%. Expectations were for a .2% increase in July which would have generated a 3.4% year over year increase. Natural gas and power inflation increased 1.6% for the month of July.