Natural Gas Price Prediction – Prices Rise Despite Larger than Expected Inventory Build

Natural Gas prices moved higher on Thursday, despite a larger than expected build in natural gas inventories. Natural gas in storage was 1,764 Bcf as of Friday, March 26, 2021, according to EIA estimates. This represents a net increase of 14 Bcf from the previous week. Expectations were for a 4 Bcf build according to survey provider Estimize. Stocks were 225 Bcf less than last year at this time and 36 Bcf below the five-year average of 1,800 Bcf. At 1,764 Bcf, total working gas is within the five-year historical range.

Technical Analysis

Natural gas prices whipsawed and moved higher on Wednesday. Support is seen near the 10-day moving average at 2.60. Resistance is seen near the 50-day moving average at 2.75. 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). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

ISM Manufacturing Rises More than Expected

Manufacturing activity in the U.S. soared to its highest level in more than 37 years in March, driven by strong growth in new orders, the clearest sign yet that a much anticipated economic boom was probably underway. The Institute for Supply Management (ISM) reported that its index of national factory activity jumped to a reading of 64.7 last month from 60.8 in February. That was the highest level since December 1983. Economists had forecast the index rising to 61.3 in March.