Natural Gas Price Prediction – Prices Rise but Settle off Session Highs as Weather Remain Warm

Natural gas prices rallied sharply for a 6^th buttle settled well off the session highs. The weather remains the catalyst as warmer than normal weather . According to the National Oceanic Atmospheric Administration, there is two storms in the Atlantic, moving from Africa with a 30% chance abnd 20% chance of turning into a tropical cyclone in the next 48-hours.

Technical Analysis

Natural gas prices continued to rally after rising as much as 4% intra-day but finishing the session up 1.5%. Support is seen near the 10-day moving average near 3.37. Resistance is seen near June highs at 3.92. Short-term momentum is turning negative which is surprising as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Injection Rates Are Decelerating

The average rate of injections into storage is 15% lower than the five-year average during the  refill season. If the rate of injections into storage matched the five-year average of 8.0 Bcf per day for the remainder of the refill season, the total inventory would be 3,565 Bcf on October 31, which is 154 Bcf lower than the five-year average of 3,719 Bcf for that time of year.