Natural Gas Price Prediction – Prices Close Unchanged but Momentum has Turned Negative

Storms continue to linger
David Becker
Natural gas daily chart, September 18, 2019

Natural gas prices were unchanged on Friday. Negative sentiment has weighed on prices following a larger than expected build in inventories on Thursday. Storms continue to make their presence, but none are expected to hit a natural gas infrastructure location. There are currently 2-storms that have less than a 20% chance of becoming a tropical cyclone in the southern Atlantic.   The weather is expected to be much warmer than normal over the next 8-14 days according to the National Oceanic Atmospheric Administration.

Technical Analysis

Natural gas prices were unchanged on Friday making a lower high and a lower low. Prices slammed through short term support on Thursday which was seen near the upward sloping trend line break out level and through the 10-day moving average at 2.59, which is now seen as resistance. Short term support is seen near the 20-day moving average at 2.45. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is about to turn negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

Net Injections Rise

Net injections into storage totaled 84 Bcf for the week ending September 13, compared with the five-year average net injections of 82 Bcf and last year’s net injections of 84 Bcf during the same week. Working gas stocks totaled 3,103 Bcf, which is 75 Bcf lower than the five-year average and 393 Bcf more than last year at this time.  According to the EIA, the average rate of net injections into storage is 28% higher than the five-year average so far in the refill season. The EIA estimates that if the rate of injections into storage matched the five-year average of 10.7 Bcf/d for the remainder of the refill season, total inventories would be 3,617 Bcf on October 31, which is 75 Bcf lower than the five-year average of 3,692 Bcf for that time of year.

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