Natural Gas Price Prediction – Prices Bounce From Oversold Condition

Natural gas prices edged higher on Tuesday rebounding back to the resistance level. The weather is now expected to be cooler than normal for most of the United States for the next 6-10 and 8-14 days. At this time of year, cooler than normal weather removes cooling demand, as there is little heating demand required. Natural gas inventories are expected to rise by 115Bcf according to Estimize. This compared to a 114 Bcf increase last week which was higher than the 104 Bcf expected. LNG exports were flat week over week according to the EIA.

Technical Analysis

Natural gas prices moved higher on Tuesday, rebounding 0.6%, after tumbling on Monday. Prices are capped near resistance which was former support at a horizontal trend line near 2.43. Support is seen near the May 2017 lows at 1.91. Short term momentum is turning positive as the fast stochastic generated a crossover buy signal oversold territory. The current reading on the fast stochastic is 11.6 below the oversold trigger level of 20 which could foreshadow a correction. The relative strength index (RSI) which is a momentum oscillator bounced near the oversold level of 30 and has increased back to 36, reflecting some posiive momentum. Medium term momentum remains negative, as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.

LNG Exports Were Flat Week over Week

US liquefied natural gas exports flat week over week. Eleven LNG vessels with a combined LNG-carrying capacity of 41.4 billion cubic feet departed the United States from May 23 to May 29, according to the EIA. Two vessels, one at Sabine Pass and one at a newly commissioned Cameron LNG facility in Louisiana, were loading at their respective terminals on Wednesday. This would be the first export cargo from the Cameron LNG project according to the EIA.