Natural Gas Price Prediction – Prices Rise as Tropical Depression 9 Forms

Natural gas prices moved higher on Tuesday bucking up against resistance. Fear of a tropical storm moving into the Gulf of Mexico generated higher prices and increasing volatility. Tropical depression number 9, has formed into the Atlantic and has a 90% chance of turning into a tropical cyclone in the next 48-hours according to the National Oceanic Atmospheric Administration. The weather is expected to remain warmer than normal on the coasts and cooler than normal in the mid-west according to NOAA.

Technical analysis

Natural gas prices moved higher on Monday climbing nearly 4%. Resistance is seen near the 50-day moving average at 1.80, while support is seen near the 10-day moving average at 1.73. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Injections into Storage are Slowing

Last week the EIA reported that net injections into storage totaled 37 Bcf for the week ending July 17, compared with the five-year average net injections of 37 Bcf and last year’s net injections of 44 Bcf during the same week. Working natural gas stocks totaled 3,215 Bcf, which is 436 Bcf more than the five-year average and 656 Bcf more than last year at this time.