Natural Gas Price Prediction – Prices Consolidate As New Storm Immurges

Natural gas prices attempted to move higher on Thursday ahead of the DOE inventory report scheduled to be released one day delayed on Friday due to the observance of the veterans day holiday. Expectations are for a 14 Bcf build in natural gas stockpiles according to survey provider Estimize. Hurricane ETA is moving inland and is no longer a treat to natural gas infrastructure. There is a second storm in the Caribbean that has an 80% chance of forming a tropical cyclone according to the National Oceanic Atmospheric Administration.  The weather is expected to be warmer than normal for the next two weeks according to the most recent forecast from NOAA.

Technical Analysis

Natural gas prices moved lower on Thursday but were nearly unchanged. Resistance is seen near the 10-day moving average at 3.04. Target support is seen near the July lows at 2.65.  The 10-day moving average has crossed below the 50-day moving average which means that a short-term downtrend is now in place. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints in the red but the trajectory is moving higher which points to consolidation.

Demand rises, driven by LNG exports

Total U.S. consumption of natural gas rose by 1.4% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation declined by 12.2% week over week. In the residential and commercial sectors, consumption increased by 20.4% amid cooler-than-normal temperatures on the East Coast. Industrial sector consumption increased by 1.4% week over week.