Natural Gas Price Prediction – Prices Drop Sharply Following Gas Inventory Report

The jet stream has kept storms away from natural gas installations
David Becker
Natural gas weekly chart, September 16, 2019

Natural gas prices moved lower tumbling 3.7% following a larger than expected build. Prices fell sharply below support, despite several storms that continue to move across the lower Atlantic. The jet stream, for the 2019 hurricane season has pushed most of the storms North East before they reach the Florida shores. Tropical storm Jerry was upgraded to Hurricane Jerry with 85-mile an hour sustained winds. The storm is expected to head to the US, and then move northeast away from the United States and back out to the Atlantic.

Technical Analysis

Natural gas prices tumbled, generating a false breakout and likely trapping many new longs, that are stopping out of their positions. Prices slammed through short term support which was seen near the upward sloping trend line break out level and through the 10-day moving average at 2.59, which is now seen as resistance. Short term support is seen near the July highs at 2.50. A close below that level would lead to a test of the 2.30 level. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading of fast stochastic is 62. Medium-term momentum is about to turn negative as the MACD (moving average convergence divergence) index is poised to generate a crossover sell signal.

Natural Gas Inventories Rise More than Expected

The Energy Information Administration reported on Thursday that gas in storage was 3,103 Bcf as of Friday, September 13, 2019. This represents a net increase of 84 Bcf from the previous week. Expectations were for a 78 Bcf according to the final estimate from Estimize. Natural gas stockpiles were 393 Bcf higher than last year at this time and 75 Bcf below the five-year average of 3,178 Bcf. At 3,103 Bcf, total working gas is within the five-year historical range.

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