Natural Gas Price Prediction – Prices Consolidate Ahead of EIA Inventory Report

Expectations are for inventories to rise by 57 Bcf
David Becker

Natural gas prices attempted to move higher on Wednesday but were unable to gain traction and experienced a wave of selling near resistance. This comes ahead of the Thursday inventory report from the Department of Energy. Expectations are for a 57 Bcf increase according to reporting service Estimize. Last week, inventories came in at 65 Bcf well above the 42 Bcf increase expected by analysts. There are no expected tropical cyclones expected in the Atlantic or the Gulf of Mexico during the next 48 hours according to the National Oceanic Atmospheric Administration (NOAA). Additionally, the weather in the US is expected to be cooler than normal over the next 8-14 days potentially reducing cooling demand.

Technical Analysis

Natural gas prices attempted to rebound but ran into resistance near the 10-day moving average near 2.15 and sold off to close lower. Support is seen near the 2016 lows at 1.62. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices. The fast stochastic, which is an oscillator that measures overbought and oversold levels, is printing a reading of 22, just above the oversold trigger level of 20.

The EIA Forecasts Production will Rise

Relatively low natural gas prices have also led to higher natural gas-fired generation this summer. Which has helped reduce the overall cost of electricity throughout most of the United States. The EIA forecasts that US dry natural gas production will average 91.0 billion cubic feet per day in 2019, up 7.6 Bcf per day from 2018. EIA expects monthly average natural gas production to grow in late 2019 and then decline slightly during the first quarter of 2020 as the lagged effect of low prices in the second half of 2019 reduces natural gas-directed drilling. However, EIA forecasts that growth will resume in the second quarter of 2020, and natural gas production in 2020 will average 92.5 Bcf per day.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US