Natural Gas Price Prediction – Prices Rise As Storms in the Atlantic Brew

Natural gas prices move 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 week’s larger than expected build of 58 Bcf. The weather remains warmer than normal in the southwest part of the US which is increasing cooling demand. There are currently three storms moving across the Atlantic Ocean and it appears that the new trajectory has them entering the Caribbean Sea and into the Gulf of Mexico. This could be an issue for natural gas infrastructure. The first disturbance has a 40-60% chance of turning into a tropical cyclone. The second now has a 90% chance of becoming a tropical cyclone. The last, which is just coming off the coast of Africa has less than a 20% chance of becoming a tropical cyclone.

Technical Analysis

Natural gas prices moved higher on Wednesday and are poised to test higher levels. Resistance is seen near the November 2019 highs at 2.70. Support is seen near the 10-day moving average at 2.26. Short-term momentum is neutral as the fast stochastic moves sideways. The current reading on the fast stochastic is 95, above the overbought trigger level of 80, which could foreshadow a correction. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.