Natural Gas Price Prediction – Prices Rebound Ahead of Inventory Data

Natural gas prices rebounded on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 47 Bcf build in stockpiles according to survey provider Estimize. This follows last week’s smaller than expected 49 Bcf build.  The weather is expected to be warmer than average on the West Coast and cooler than average in the  North East for the next two weeks. There are no anticipated disturbances to become tropical cyclones in the Atlantic or Gulf of Mexico over the next 48-hours. Production declined in the latest week.

Technical Analysis

Natural gas prices were higher on Wednesday, rebounding following Tuesday’s losses. Support is seen near the 10-day moving average near 3.89. Resistance is seen near the July highs at 4.19. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal in oversold territory. The fast stochastic has moved from above 80 (overbought) to 65, reflecting accelerating negative momentum. Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a sliding trajectory that points to consolidation.

U.S. Supplies Declined in Latest Week

U.S. total supply of natural gas declines slightly this week. According to data from the Energy Information Administration average total supply of natural gas fell by 0.1% compared with the previous report week. Dry natural gas production grew by 0.1% compared with the previous report week to average 92.9 billion cubic feet per day. Average net imports from Canada decreased by 3.0% from last week to 5.0 Bcf per day.