Natural Gas Price Prediction – Prices Rebound Following EIA Inventory Report

Natural gas prices rallied on Thursday climbing 1.4%, following a smaller than expected build in natural gas inventories. Stockpiles are on the rise, and will continue until the withdrawal season which begins in November. The trajectory of natural gas inventory increases are poised to test the average of the 5-year range. There is currently no tropical storms brewing in the Atlantic, which is keeping natural gas volatility subdued.

Technical Analysis

Natural gas prices rebounded on Thursday rallying 1.4%, closing below resistance which is now support  the 10-day moving average at 2.295. Additional support on natural gas is seen near the June lows at 2.16. Short term momentum has turned negative as the fast stochastic generate a crossover sell signal after recently generating a buy signal. Medium term momentum is neutral as the MACD (moving average convergence divergence) histogram is flat, hovering near the zero-index line which reflects consolidation.

Inventories Rose Less than Expected

The Energy Information Administration reported that working gas in storage was 2,301 Bcf as of Friday, June 21, 2019. This represents a net increase of 98 Bcf from the previous week. Expectations were for a 103 bcf increase according to Estimize. Stocks were 236 Bcf higher than last year at this time and 171 Bcf below the five-year average of 2,472 Bcf. At 2,301 Bcf, total working gas is within the five-year historical range.