Natural Gas Price Prediction – Prices Fall Ahead of Thursday’s Inventory Report

Natural gas prices moved lower again on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for inventories to rise by 95 Bcf according to survey provider Estimize. The weather is expected to be normal over the next 8-14 days. Given we are in a shoulder season where both heating and cooling demand are limited, prices have little reason to rally. There is one disturbance in the Gulf of Mexico but there is little chance that it will become a tropical cyclone according to NOAA.

Technical Analysis

Natural gas prices declined 1.4% on Tuesday but rebounded at trend line support near an upward sloping trend line that comes in near the session lows at 2.30. Resistance is seen near the 10-day moving average at 2.48. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. The current reading of 3, is below the oversold trigger level of 20 which could foreshadow a correction.

LNG Export Rise

The EIA reports that liquefied natural gas (LNG) exports increase week over week. Twelve LNG vessels with a combined LNG-carrying capacity of 44 Bcf departed the United States from September 19 through September 25, according to shipping data from the EIA.

The EIA is expected to release inventories estimates on Thursday. Expectations are for a 95 Bcf increase. This comes following last week’s net injections into storage totaled 102 Bcf for the week ending September 20.