Natural Gas Price Prediction – Prices Edge Lower Following Inventory Report

Natural gas prices moved lower on Thursday but made a higher high and a higher low which is a positive sign. This followed a larger than expected build in natural gas inventories according to survey provider Estimize. There is one disturbance in the Caribbean that has a 10% chance of turning into a tropical cyclone according to the National Oceanic Atmospheric Administration. The weather is expected to turn mild and then warmer than normal over the next two weeks which should reduce natural gas heating demand.

Technical Analysis

Natural Gas prices moved lower on Wednesday but finished well off the session lows. Prices made a higher-higher and a higher low, which his a good sign. Prices broke through trend line support on Wednesday which is now seen as resistance at 2.54. The 10-day moving average crossed below the 50-day moving average which means that a medium-term downtrend is now in place. Momentum is negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

Natural Gas Stores Rise More than Expected

Natural gas in storage was 3,756 Bcf as of Friday, September 25, 2020, according to the EIA. This represents a net increase of 76 Bcf from the previous week. Stocks were 471 Bcf higher than last year at this time and 405 Bcf above the five-year average of 3,351 Bcf. At 3,756 Bcf, total working gas is above the five-year historical range.