Natural Gas Price Prediction – Prices Rebound but Remain Range boundInventories come out in line with expectations
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.
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 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.