Natural Gas Price Prediction – Prices Edge Higher Ahead of Inventory Report

Natural gas prices were barely changed on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 40 Bcf build in stockpiles according to survey provider Estimize. One disturbance has entered the Gulf of Mexico that has a 50% change of becoming a tropical cyclone in the next 48 hours. There is a second storm coming off the coast of Africa with a 50% chance of becoming a tropical cyclone. The weather is expected to remain warmer than normal for the next 2-weeks, according to NOAA. Domestic consumption declined in the latest week but overall demand rose.

Technical Analysis

On Wednesday, natural gas prices moved higher, but were barely changed closing above resistance, which is now short-term support near the 10-day moving average at 3.90. Target resistance is seen near the August highs at 4.2. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Negative medium-term momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in negative territory with a rising trajectory which points to consolidation.

LNG Demand Support Total Consumption

U.S. domestic natural gas consumption decreased this week, but overall demand grew in response to higher natural gas deliveries to LNG export facilities. Total U.S. consumption of natural gas fell by 0.2%, or 0.1 Bcf per day, compared with the previous report week, according to data from the EIA. Natural gas used in power generation and the residential and commercial sectors decreased 0.2% and 1.0%, respectively, even with above-average temperatures across the West.