Natural Gas Price Prediction – Prices Edge Lower but Bounce at Support

Natural gas prices moved lower but finished near the session highs despite a higher than expected build in natural gas stockpiles, reported by the U.S. Department of Energy on Thursday. A stronger dollar weighed on most commodities as the greenback broke out against most major currencies. A stronger-than-expected unemployment claim helped buoy the U.S. dollar.

Technical Analysis

Natural gas prices rebounded from session lows and closed near the high generating nearly a Doji day with a long tail. That usually describes the rejection of lower prices which bounced near support at the 50-day moving average at 3.72. Resistance is seen near the 20-day moving average at 3.97. Prices are oversold as the fast stochastic is printing a reading of 18, below the oversold trigger level of 20, which foreshadows a correction.  Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in negative territory with a sliding trajectory which points to lower prices.

Natural Gas Inventories Rise More than Expected

According to the EIA, natural gas in storage was 2,822 Bcf as of Friday, August 13, 2021. This represents a net increase of 46 Bcf from the previous week. Expectations were for a 25 Bcf build, according to Estimize. Stocks were 547 Bcf less than last year at this time and 174 Bcf below the five-year average of 2,996 Bcf. At 2,822 Bcf, total working gas is within the five-year historical range.