Natural Gas Price Prediction – Prices Decline Following Bearish Inventory Report

Prices drop as inventories rise more than expected
David Becker
EIA Crude Oil Report

Natural gas prices moved lower on Thursday and continued to perpetuat a downtrend. Prices were under pressure following a larger than expected build in natural gas inventories reported on Thursday by the Department of Energy. The weather is expected to be warmer than normal over the next 6-10 days, but moderate temperature is unlikely to move the needle in April.

Technical Analysis

Natural gas prices continued to move lower after breaking through key support levels near 2.54. The contract lower was 2.48. The next level of target support is the 2016 lows at 1.61. Resistance is seen near the former breakdown level which is a horizontal trend line at 2.55. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices and accelerating negative momentum. The fast stochastic also generated a crossover sell signal, which points to accelerating negative moemtnum. The current reading on the fast stochastic is 2 which is below the oversold trigger level of 20, and could foreshadow a correction.

Inventories Rose More than Expected

The EIA reported that working gas in storage was 1,247 Bcf as of Friday, April 12, 2019. This represents a net increase of 92 Bcf from the previous week. Expectations were for a 72 Bcf build. Stocks were 57 Bcf less than last year at this time and 414 Bcf below the five-year average of 1,661 Bcf. At 1,247 Bcf, the total working gas is within the five-year historical range. Stocks are on the rise, and the trajectory is pointing to rising inventories that are likely to reach the middle of the 5-year range.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US