Natural Gas Price Prediction – Prices Drop on Annual Inventory Estimate3s

Natural gas prices dropped on Friday, following Thursday decline in the wake of a larger than expected build in natural gas inventories. Prices sliced through support and is poised to test lower levels. This comes as natural gas whipsawed through most of the week, chopping up and down by 5% or more. For the week natural gas declined by 1%. Natural gas withdrawals from storage were the lowest since 2016 according to the EIA.

Technical Analysis

Natural gas prices moved lower dropping 4.5%, as warmer than expected weather moved into the west coast. Prices slid through support levels diving below both the 50-day moving average at 1.79 and the 10-day moving average at 1.76. Target support on natural gas is seen near the mid-April lows at 1.55. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has peaked and is turning negative as the MACD (moving average convergence divergence) histogram is printing in the black and sliding lower with a negative trajectory which points to lower prices.

Storage Dropped

The EIA reported on Friday that working natural gas in storage in the Lower 48 states as of March 31, 2020, totaled 2,008 billion cubic feet (Bcf), 19% more than the previous five-year (2015–19) average for the end of the heating season, according to EIA’s Weekly Natural Gas Storage Report. The 2019–20 heating season, which ran from November 1, 2019, to March 31, 2020, ended with the most working natural gas in storage since the 2016–17 winter, with 1,718 Bcf in net withdrawals, the least in four winters.