Natural Gas Price Prediction – Prices Have Rebounded but Resistance Looms

Natural gas prices moved higher on Monday and continued to rebound from oversold territory. The weather is expected to remain warmer than normal in the south east and colder than normal in the mid-west, which should drive up natural gas demand. The shoulder months are generally milder than normal but the winter weather coming across the west and upper mid-west should drive up heating demand.

Technical Analysis

Natural gas prices moved higher on Monday, rising more than 1%, and testing resistance near a downward sloping trend line at 2.63. A break would lead to a test of the April highs at 2.72. Support on natural gas is seen near the April lows at 2.44. Medium term 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 points to higher prices and accelerating positive momentum. The fast stochastic continue to rise reflecting accelerating positive momentum. The current reading on the fast stochastic is 53, is in the middle of the neutral range, and generally reflects consolidation.

LNG Exports Rise

The EIA reported that US liquefied natural gas exports increased week over week. Eight LNG vessels with a combined LNG-carrying capacity of 28.9 Bcf departed the United States from April 18 to April 24, according to the EIA. This follows an inline injection report reported by the EIA last week. Net injections into storage totaled 92 Bcf for the week ending April 19, compared with the five-year average net injections of 47 Bcf and last year’s net withdrawals of 20 Bcf during the same week. Working gas stocks totaled 1,339 Bcf, which is 369 Bcf lower than the five-year average and 55 Bcf more than last year at this time.