Natural Gas Price Prediction – Prices Consolidate Following Inventory Report

Natural gas were nearly unchanged and whipsawed throughout the session following the Energy Department report on stockpiles. According to the National Oceanic Atmospheric Administration, tropical storm Elsa has formed in the Atlantic and it is heading for the Gulf of Mexico. The current trajectory for the storm is to move into the easter Gulf of Mexico and hug Florida. Any trajectory westward would push the storm into the Natural Gas Producing regions near New Orleans.  The weather is expected to remain warmer than normal in the West and North East for the next 2-weeks according to NOAA.

Technical Analysis

Natural gas prices continued to consolidate after a robust week. Prices made a lower high and a higher low which is a sign of indecision.  Support is seen near the 10-day moving average near 3.44. Resistance is seen near June highs at 3.92. Short-term momentum is turning negative which is surprising as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This 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 Slightly Higher than Expected

According to the EIA, natural gas inventories came in at 2,558 Bcf as of Friday, June 25. This increase in stockpiles represents an increase of 76 Bcf from the previous week. Expectations were for a 73 Bcf build in stocks according to survey provider Estimize. Stocks were 510 Bcf less than last year at this time and 143 Bcf below the five-year average of 2,701 Bcf. At 2,558 Bcf, total working gas is within the five-year historical range.