Natural Gas Price Prediction – Prices Attempt to Break Out and Falter

Natural gas prices attempted to break out on Wednesday ahead of Thursday’s inventory report. Expectations are for stockpiles to decline by 60 Bcf according to survey provider Estimize. This compares to a 109 Bcf draw in stocks last week. The weather on the east coast of the United States is expected to remain warmer than normal while temperatures out west are expected to remain cool. Support fell in the latest week driven by a decline in imports from Canada

Technical Analysis

Natural gas prices attempted to break out but were met with resistance near a downward sloping trend line that comes in near $2. Support is seen near the 10-day moving average at 1.79. Prices appear to be attempting to find a bottom. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) generated a crossover buy signal. This occurs when 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). Short term momentum has turned neutral. The fast stochastic has whipsawed turning from upward momentum is neutral momentum.

Supply Declined in the latest Week

Supply declined in the latest week according to the EIA. They report that the average total supply of natural gas fell by 1% compared with the previous report week. Dry natural gas production remained unchanged week over week. The average net imports from Canada decreased by 11% from last week amid warmer-than-normal temperatures in the Northeast and Midwestern markets.