Natural Gas Price Prediction – Prices Fall but Continue to Consolidate

Natural gas prices continued to trend lower on Monday, breaking through support and poised to test lower levels. The weather through the US has been cooler than normal, but weather in May generally does not drive natural gas prices. Inventories are contining to build up according to the latest estimate by the US Department of Energy. LNG exports remain flat, which is another headwind for natural gas prices.

Technical Analysis

Natural ags prices moved lower on Monday, falling through support at the 10-day moving average at 2.545. Support is now seen near the April lows at 2.44. Short term momentum is negative as the fast stochastic generated a crossover sell signal. Medium term momentum is neutral. The MACD histogram is printing in the black with a flattening trajectory which points to further consolidation. The trajectory of the 10-day moving average is also flat, which tells us that prices are more likely to consolidate then to trend lower.

LNG Exports Consoidate

The EIA reported that liquefied natural gas exports unchanged week over week. Eight LNG vessels with a combined LNG-carrying capacity of 27.6 Bcf departed the United States from April 25 to May 1,. One vessel was loading at the Sabine Pass terminal. The EIA also reports that the Elba Island LNG facility in George expects to produce its first batch of LNG for testing this week. Trains 1-6 are in the commissioning phase and are expected to enter service in the second quarter of 2019.

Inventories continue to rise. Last week the EIA repored that net injections into storage totaled 123 Bcf for the week ending April 26, compared with the five-year average net injections of 70 Bcf and last year’s net injections of 50 Bcf during the same week. Working gas stocks totaled 1,462 Bcf, which is 316 Bcf lower than the five-year average and 128 Bcf more than last year at this time.