Natural Gas Price Prediction – Prices Drop as Storms Fail to Threaten Infrastructure

Natural gas prices moved lower on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 47 BCF build in natural gas stockpiles according to survey provider Estimize. The weather is expected to be much cooler than normal throughout the mid-west over the next 2-weeks which should increase heating demand. There are 2-tropical storms one in the Atlantic and one in the Gulf of Mexico but neither are expected to hit any natural gas infrastructure. There are also two storms moving across the Atlantic Ocean that currently have approximately a 20% chance of turning into tropical cyclones according to NOAA.

Technical analysis

Natural gas prices moved lower on Wednesday pushing through support near the 20-day moving average which is now seen as short-term resistance at 2.49. Additional resistance is seen near the 10-day moving average at 2.59. Target support is seen near the August lows at 2.23 and then the 50-day moving average at 2.16. 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).

LNG Export Decline

U.S. LNG exports decrease week over week. Seven LNG vessels with a combined LNG-carrying capacity of 26 Bcf departed the United States between August 20 and August 26, 2020, according to shipping data provided by the EIA.