Natural Gas Price Prediction – Prices Rebound Near Support on Cold Weather Forecast

The weather over the mid-west currently is much cold than normal. Chicago the third largest urban and sub-urban centers in the country will see the 2^nd coldest day on record. The draws will be substantial, and then a warming period will take and then the cold weather will return.

Technical Analysis

Natural gas prices rebounded from session lows recapturing trend line support at 2.87. Target resistance is seen near the 10-day moving average at 3.19. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. The current reading on the fast stochastic is 15, below the oversold trigger level of 20 and could foreshadow a correction. Medium term momentum is flat as the MACD is poised to generate a crossover sell signal. The MACD histogram is printing near the zero index level with a slightly declining trajectory which reflects consolidation.

Storage:

Net withdrawals from storage totaled 163 Bcf for the week ending January 18, compared with the five-year average net withdrawals of 185 Bcf and last year’s net withdrawals of 273 Bcf during the same week. Working gas stocks totaled 2,370 Bcf, which is 305 Bcf lower than the five-year average and 33 Bcf more than last year at this time. The trajectory of the inventories will decline rapidly for the next 2-weeks and then level out as the next cold front is awaited.

U.S. liquefied natural gas exports decrease week over week. Six LNG vessels, four from Sabine Pass, one from Cove Point and one from Corpus Christi with a combined LNG-carrying capacity of 21.6 Bcf departed the United States between January 17 and January 23. Two vessels were loading at the Sabine Pass terminal on Wednesday, according to shipping data.