Natural Gas Price Prediction – Prices Consolidate Following EIA Inventory Report

Natural gas prices where nearly unchanged on Thursday following a mixed report from the Department of Energy.  The weather is expected to be colder than normal for most of the west coast and midwest for both the 6-10 and 8-14 day forecast according to the National Oceanic Atmospheric Administration.  Colder than normal weather generally increases heating demand. Natural gas inventories are now above the lower end of the 5-year average from for this time of year.

Technical Analysis

Natural gas prices moved sideways on Thursday and continue to hover just above support near a horizontal trend line that comes in near 2.55. Resistance is seen near the 10-day moving average at 2.63. Momentum is neutral. The MACD (moving average convergence divergence) histogram is printing near the zero-index level with a flat trajectory which reflects consolidation. The fast stochastic continues to hover near the signal line with a flat trajectory which also reflects consolidation. The fast stochastic is printing a reading of 6, well below the oversold trigger level which could foreshadow a correction.

Natural Gas Storage Declines Above the Lower end of the 5-Year Average Range

The Energy Information Administration reported on Thursday that working gas in storage was 1,882 Bcf as of Friday, February 8, 2019. This represents a net decrease of 78 Bcf from the previous week. Expectations were for a decline of 117 Bcf according to Estimize. The Bloomberg estimates where for a 79 Bcf draw which would make the estimate in line with the actual. Stocks were 30 Bcf less than last year at this time and 333 Bcf below the five-year average of 2,215 Bcf. At 1,882 Bcf, the total working gas is within the five-year historical range. LNG exported declined in the latest week which also led to a small draw in natural gas inventories. The weather was also warmer than normal, but that is expected to change to cold weather in the next reporting week.