Natural Gas Price Prediction – Prices Fall as Momentum Turns Negative

Natural gas prices moved lower on Wednesday ahead of the Department of Energy’s inventory report scheduled for Thursday. Expectations are for inventories to decline by 145 Bcf according to survey provider Estimize. The weather is expected to remain warmer than normal for the next 6-10 days according to NOAA, but they moved back toward normal over the 8-14 day period. US LNG exports increased in the latest week. Expectations moving forward are that LNG exports to China will begin to increase.

Technical Analysis

Natural gas prices moved lower on Wednesday and are poised to test support near the January lows at 1.83. A break of this level would lead to a test of the 2016 lows at 1.61. Resistance to natural gas prices is seen near the 10-day moving average at 1.95. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading of 9, is below the oversold trigger level of 20 and could foreshadow a correction. 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). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.

US LNG Exports Rose in the Latest Week

US liquefied natural gas exports increase week over week. Fifteen LNG vessels with a combined LNG-carrying capacity of 54 Bcf departed the United States between January 16 and January 22, 2020, according to shipping data compiled by the EIA. US LNG exports should begin to accelerate higher as the US-China phase one trade deal comes into effect.