Natural Gas Price Prediction – Prices Rise Ahead of Inventory Report

Natural gas prices closed higher on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 45 Bcf build in stockpiles according to survey provider Estimize. This follows last weeks 56 Bcf build. The weather is expected to remain warmer than normal over the next 8-14 days according to the National Oceanic Atmospheric Administration. There is no tropical cyclone activity in the Atlantic or the Gulf of Mexico. Demand rose in the latest week due to power generation

Technical Analysis

Natural gas prices moved higher and continue to consolidate at the lower end of the recent range. Prices are hovering just below resistance near the 10-day moving average at 1.78. Target support is seen near the June lows at 1.51. Resistance is seen near the 50-day moving average near 1.89. Short term momentum has turned positive as the fast stochastic generated a short term buy signal. Medium-term momentum is positive to neutral as the MACD (moving average convergence divergence) histogram prints in the black with a decelerating trajectory which points to consolidation.

Demand Rise on Strong Power Generation

Demand rises because of increased power generation. Total US consumption of natural gas rose by 3.7% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 7.0% week over week. In the residential and commercial sectors, consumption increased by 0.3%. Industrial sector consumption decreased by 1.0% week over week. Natural gas exports to Mexico decreased 3.7%.