Natural Gas Price Prediction – Prices Rebound, but Trend Points to Lower prices

Estimize forecasts a 90 Bcf rise in inventories
David Becker
Crude Oil daily chart, April 22, 2019

Natural gas prices made a dead cat bounce on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 90 Bcf increase in stockpiles according to Estimize. This follows at 92 Bcf increase in natural gas inventories last week, which was approximately 20 Bcf higher than expectations. Warmer than normal weather is expected to cover most of the east coast for the next 8-14 days reducing any additional cooling demand.

Technical Analysis

Natural gas prices traded sideways moving slightly higher on Wednesday, following Tuesday’s drop. Prices appear to be forming a bear flag pattern after breaking down last week below support near the 2.54. Short term resistance is seen near the 10-day moving average at 2.56. Support is seen near the 2016 lows at 1.65.  Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The signal occurred as the fast stochastic is printing a reading of 5, which is well below the oversold trigger level of 20 on the fast stochastic which could foreshadow a correction. Medium term negative momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.

The EIA Forecast Higher Production

The EIA forecasts that dry natural gas production will average 91.0 billion cubic feet per day in 2019, up 7.6 Bcf per day from 2018. EIA expects natural gas production will continue to grow in 2020 to an average of 92.5 Bcf per day. EIA estimates that natural gas inventories ended March at 1.2 trillion cubic feet which would be 17% lower than levels from a year earlier and 30% lower than the five-year average. EIA forecasts that natural gas storage injections will outpace the previous five-year average during the April-through-October injection season and that inventories will reach 3.7 Tcf at the end of October, which would be 13% higher than October 2018 levels but 1% lower than the five-year average.

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
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.
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.