Natural Gas Price Prediction – Prices Rebound but Remain Range bound

Inventories come out in line with expectations
David Becker
Crude Oil daily chart, May 14, 2019

Natural gas prices whipsawed initially moving lower and then rebounding and settling the session up slightly more than 1%. This came on the heels of the Department of Energy’s inventory report which basically came out in line with expectations.  The trajectory of the gains, continue to point to higher inventories as the current levels attempt to get back to the 5-year average level. The 5-year average price of natural gas is $3 per mmbtu, which provides about 50 cents per mmbtu of upside if demand started to pick up. The weather is expectect to remain near normal for the next 8-14 days, which will keep demand for residential consumption steady. The next big events are supply disruptions from storms. A trade deal that would begin to accelerate LNG exports back to China without a 25% tariff would also likely give prices a pop.

Technical Analysis

Natural gas prices rebounded after testing the 10-day moving average which is seen as short-term support near 2.60. Resistance is seen near the 50-day moving average at 2.73. Short-term momentum turned positive as the fast stochastic generated a crossover sell signal. This indicator has whipsawed along with prices. The current reading of 78 is just below the overbought trigger level of 80. Medium term momentum is neutral to positive as the MACD (moving average convergence divergence) histogram is printing in the black with a gradually increasing trajectory which points to consolidating to higher prices.

The EIA Reports Inventories that are In Line with Expectations

The EIA reported that working gas in storage was 1,653 Bcf as of Friday, May 10, 2019. This represents a net increase of 106 Bcf from the previous week. Expectations were for a 106 Bcf Increase. Stocks were 130 Bcf higher than last year at this time and 286 Bcf below the five-year average of 1,939 Bcf. At 1,653 Bcf, total working gas is within the five-year historical range.

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

IMPORTANT DISCLAIMERS
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.
RISK DISCLAIMER
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.
FOLLOW US