Natural Gas Price Prediction – Prices Edge Higher Before Inventory Report

Natural gas prices opened higher but closed lower than they opened but still up on the session. This comes ahead of Thursday’s inventory report from the Department of Energy. The weather remains the catalyst as warmer than normal weather. According to the National Oceanic Atmospheric Administration, there is two storms in the Atlantic, moving from Africa with a 70% chance and 0% chance of turning into a tropical cyclone in the next 48-hours. According to the European tropical model, the second storm that has a greater chance is poised to head toward the Gulf of Mexico.

Technical Analysis

Natural gas prices continued to rally but only edged higher. Prices made a lower high and a higher low which is a sign of indecision.  Support is seen near the 10-day moving average near 3.42. Resistance is seen near June highs at 3.92. Short-term momentum is turning negative which is surprising as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Inventories Are Expected to Rise

Natural gas inventories are expected to rise by 72 Bcf on Thursday when the Department of Energy releases its inventory report. This release follows a week when stocks rose 55 Bcf less than the 74 Bcf draw expected by Estimize.