Natural Gas Price Prediction – Prices Consolidate Ahead of Inventory Report

Natural gas prices moved lower on Wednesday ahead of Thursday inventory report from the Department of Energy. Expectations are for a 55 Bcf draw according to the survey provider Estimize. The weather is expected to remain above normal for the next 8-14 days which could continue to put downward pressure on prices. LNG exports declined week over week according to the Energy Information Administration (EIA). Hedge funds remain short, which could eventually lead to a short squeeze but this will not occur until the 8-14 day forecast shows that cold weather is coming. Currently, stockpiles are sitting near the 5-year average of inventory levels.

Technical analysis

Natural gas prices edged lower after initially testing higher levels which is the continuation of a bear flag pattern. This is a pause that refreshes lower. Resistance near the breakdown level near last week’s lows near 2.28. Support is seen near the August lows at 2.12. Medium-term momentum is negative as the MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices. Short term momentum is negative but is poised to turn positive as the fast stochastic could generate a crossover buy signal.

LNG Exports Decline

LNG exports declined week over week. Ten liquefied natural gas vessels with a combined LNG-carrying capacity of 36 Bcf departed the United States between November 28 and December 4, according to the EIA. Four vessels were loading on Wednesday.