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 25 Bcf build, according to survey provider Estimize. The weather is expected to remain warmer than normal over most of the United States for the next 2-weeks. Hurricane Grace is making its way through the Caribbean and is expected to enter the Gulf of Mexico. The trajectory takes the storm over across Mexico and not up to New Orleans and the U.S. Natural gas installations. The remnants of the Tropical Depression Fred are making through way up the East Coast of the United States.

Technical Analysis

Natural gas prices moved slightly higher on Wednesday. Prices hit a lower low and a lower high, which is a sign of a downtrend. Support is seen near the 50-day moving average at 3.70. Resistance is seen near the 10-day moving average at 4.005. Prices are oversold as the fast stochastic is printing a reading of 15, below the oversold trigger level of 20, which could foreshadow a correction. Medium-term 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.

Supply Declines

U.S. total supply declines for the second week in a row, as dry natural gas production and imports decline. According to data from the EIA, the average total supply of natural gas fell by 0.3%, or 0.3 Bcf per day, compared with the previous report week. Dry natural gas production declined 0.1%, net natural gas imports from Canada dropped 4.1%, and send out from LNG import terminals decreased 1.6% to 0.06 Bcf per day.