Natural Gas Price Prediction – Prices Rise Ahead of Inventory Report

Natural gas prices moved higher on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 184 Bcf draw, according to survey provider Estimize. The weather is expected to be much colder than normal throughout most mid-west for the next 6-10 days and then moderating slightly during the 8-14 day forecast. Natural gas production fell in the latest week.

Technical Analysis

Natural gas prices moved higher on Wednesday, rising by 4.7% and closing at a 3-month high. Resistance is seen near the February highs at 3.057. Support is seen near the 10-day moving average at 2.82. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 85, above the overbought trigger level of 80, foreshadowing a correction. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Supply Declines

Supply falls drive by a decline in production. According to data from the EIA, the average total supply of natural gas fell by 0.2% compared with the previous report week. Dry natural gas production decreased by 0.5% compared with the previous report week. Average net imports from Canada increased by 4.2% from last week.