Natural Gas Price Prediction – Prices Form Inside Day Following Inventory Report

David Becker
Natural Gas

Natural gas prices moved higher on Thursday but traded well off its highs following the inventory report. The price was up early on colder than normal weather which is forecast to cover most of the United States for the next 8-14 days. Inventory levels decline more than expected according to the Bloomberg survey but where less than expected according to Estimize.  The trajectory of the declines have slowed and current level are now very close to the bottom of the 5-year range for this time of year.

Technical Analysis

Natural gas prices formed an inside day closing higher. An inside day is a lower high and a higher low which generally reflects indecision. There is a wide bull flag pattern which is a pause that refreshes higher. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the black with an upward sloping trajectory which point to accelerating positive momentum.


Inventories Declined but are Now in the 5-Year Average Range

The Energy Information Administration reported that working gas in storage was 2,533 Bcf as of Friday, January 11, 2019. This represents a net decrease of 81 Bcf from the previous week. Estimize has predicted a decline of 91 Bcf. Stocks were 77 Bcf less than last year at this time and 327 Bcf below the five-year average of 2,860 Bcf. At 2,533 Bcf, total working gas is within the five-year historical range. The trajectory of the declines has also been slowing, but the cold weather that is predicted over the next 2-weeks could bring inventory levels back below the lower end of the 5-year average range during the winter.

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

Top Promotions

Top Brokers

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.