Natural Gas Price Prediction – Prices Fall Ahead of Inventory Report

Natural gas prices moved lower on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 50 Bcf build-in stockpiles, according to survey provider Estimize. The weather is expected to be warmer than normal, reducing heating demand in the final weeks of potentially cold weather. Imports from Canada declined in the latest week due to maintance.

Technical Analysis

Natural gas prices moved lower on Wednesday, pushing through support which is now resistance near the 50-day moving average at 2.71. Prices fell 1.3% and could have fallen back into a range capped by the 50-day moving average and support near the 10-day moving average at 2.63. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 78, down from 85, which reflects accelerating negative momentum out of overbought territory. Medium-term momentum is positive but turning neutral as the MACD (moving average convergence divergence) histogram prints in positive territory with a declining trajectory which points to consolidation.

Imports From Canada Deline

Imports from Canada declined due to scheduled maintenance according to the EIA. The average total supply of natural gas fell by 1.3% compared with the previous report week. Dry natural gas production decreased by 1.0% to 91.4 Bcf per day compared with 92.3 Bcf per day last report week. Average net imports from Canada decreased by 8.5% from last week, likely a result of planned maintenance on Westcoast Energy’s pipeline from the production region in British Columbia to the border with Washington State.