Natural Gas Price Prediction – Prices fall amid a weekly increase in natural gas storage

Key Insights

• Natural gas prices move lower.
• The weather is expected to be cooler in most of the US. 
• Weekly natural gas storage rose from the previous week.

On Wednesday, natural gas prices continued to sharply decline. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal during the next 6-10 days and 8-14 in the South.

However, the weather is expected to become cooler than normal during the next 6-10 days and 8-14 days in most of the United States. Prices decline as the weather becomes cooler and demand decreases. 

According to the EIA’s Weekly Natural Gas Storage report released today, working natural gas storage was 1,902 Bcf as of Friday, May 27th, which is within the five-year range. This number indicates a rise of 90 Bcf from the previous week. Natural gas stocks are 397 Bcf less than they were at this time last year. Stocks are 397 Bcf below the five-year average of 2,239 Bcf.

Technical Analysis

On Thursday, natural gas prices hover near the 10-day moving average of 8.6 following volatile trading. Support is seen near the 10-day moving average of 8.6. Resistance is seen near the $9 mark.

If prices hold above the 100day moving average, they might head to the $9 level and face upward momentum. Short-term momentum remains positive as the fast stochastic generated a crossover buy signal.

Medium-term momentum turned negative as the MACD had a crossover sell signal. The MACD (moving average convergence divergence) histogram prints in negative territory with a falling trajectory, meaning downside trade action.