Natural Gas Price Prediction – Prices Fall on Large Inventory Build

Inventories climb more than expected
David Becker
Natural Gas

Natural gas prices moved lower on Thursday following the Department of Energy’s inventory report. Prices gave back all of Wednesday’s gains, slumping more than 2.6%. The weather is expected to remain warm in the southeast for the next 6-10 days but is expected to become milder over the 8-14 day period. Working gas in storage came in larger than expected as demand likely decline and production increased.

Technical Analysis

Natural gas prices moved lower on Thursday in the wake of a larger than expected build in natural gas inventories. Prices were unable to pierce through resistance near the 10-day moving average at 2.61. Support is seen near a horizontal trend line that comes in near 2.51. Medium term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occur as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signl line (the 9-day moving average of the MACD line). The fast stochastic also generaged a crossover sell signal which points to acceleratin negative momentum.

The EIA Reports A Larger than Expected Build in Stockpiles

The Energy Information Administration reported on Thursday that working gas in storage was 1,867 Bcf as of Friday, May 24, 2019. This represents a net increase of 114 Bcf from the previous week. Expectations were for a 106 Bcf increase according to Estimize. Stocks were 156 Bcf higher than last year at this time and 257 Bcf below the five-year average of 2,124 Bcf. At 1,867 Bcf, total working gas is within the five-year historical range. The trajectory of inventories builds points to stockpiles reaching the 5-year average by July.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.