Natural Gas Price Prediction – Prices Rally Following Inventory ReportExpectations were for a 71 Bcf Build
Natural gas prices rallied on Thursday following the Department of Energy’s report on inventories. According to NOAA, the weather is expected to be warmer than normal throughout most of the United States over the next 6-10 and 8-14 days. The trajectory of inventories is rising but remain within the 5-year average range and below the 5-year average for this time of year.
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Natural gas prices moved higher on Thursday following the EIA inventory report. Prices moved back above resistance which is a downward sloping trend line seen near 2.99. Target resistance is seen near the February highs at 3.06. Target support is seen near the 10-day moving average at 2.94 and then the 50-day moving average at 2.74. Short-term momentum has flip-flopped and turned positive as the fast stochastic generated a crossover buy signal. 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).
Inventories Rose in Line with Expectations
Natural gas in storage was 2,029 Bcf as of Friday, May 7, 2021, according to the EIA. This represents a net increase of 71 Bcf from the previous week. Expectations were for a 71 Bcf build according to survey provider Estimize. Stocks were 378 Bcf less than last year at this time and 72 Bcf below the five-year average of 2,101 Bcf. At 2,029 Bcf, total working gas is within the five-year historical range.