Natural Gas Price Prediction – Price Consolidate Creating Inside Day as Momentum Turns Positive

Natural gas prices moved slightly lower on Tuesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 107 Bcf draw in stockpiles according to survey provider Estimize. The weather is expected to be milder than normal over the next 2-weeks, but a storm scheduled to hit the northeast will generate additional heating demand. Supply rose slightly in the latest week.

Technical Analysis

Natural Gas prices moved slightly lower forming an inside day which is a lower high and a higher low a sign of indecision. Support is seen near the 10-day moving average at 2.56. Resistance is seen near the December highs close to 2.90. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated 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).

Supply Rises

Supply rises driven by an increase in imports from Canada. The average total supply of natural gas rose by 0.1% compared with the previous report week. Dry natural gas production decreased by 1.2% compared with the previous report week. Average net imports from Canada contributed an average of 5.8% of total supply this report week, following a week-over-week 24.1% increase. Imports to demand markets in the U.S. Great Plains increased because of low demand in Western Canada.