Natural Gas Price Prediction – Prices Consolidate Despite Small Build

Natural gas prices remained buoyed on Thursday following a smaller than expected build in natural gas inventories. The flat trajectory of the builds ahead of the drawing season is a good sign for prices. The weather is expected to be warmer than normal for the next 2-weeks. The remnants of Ida left the East Coast a mess and will continue to buoy natural gas demand.

Technical Analysis

Natural gas prices where nearly unchanged on Thursday. Strong support is seen near the 50-day moving average near 4.00. Momentum is positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average, crosses above the MACD signal line (the 9-day moving average of the MACD line.

Inventories Rise Less than Expected

Natural gas in storage was 2,871 Bcf as of Friday, August 27, 2021, according to the EIA. Expectations were for a 29 Bcf build according to survey provider Estimize This represents a net increase of 20 Bcf from the previous week. Stocks were 579 Bcf less than last year at this time and 222 Bcf below the five-year average of 3,093 Bcf. At 2,871 Bcf, total working gas is within the five-year historical range.