Natural Gas Price Prediction – Prices Rise Despite Robust Inventory Build

Natural gas prices whipsawed forming an outside day and closed up 1.76% on the trading session. This movement followed the Department of Energy’s inventory report, which shows a slightly larger than expected build in natural gas inventories according to survey provider Estimize. The weather is expected to be cooler than normal for most of the mid-west for the next 6-days days and then moderate.

Technical Analysis

Natural gas prices moved higher on Thursday, generating an outside day which is a higher high a lower low and a lower close. Resistance is seen near the 50-day moving average at 2.72. Support is seen near the 10-day moving average at 2.56. Medium-term momentum is 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).

Inventories Rise More than Expected

Ntaural gas in storage was 1,845 Bcf as of Friday, April 9, 2021, according to the EIA. This represents a net increase of 61 Bcf from the previous week. Expections were for a 50 Bcf build in inventories according to survey provider Estimize. Stocks were 242 Bcf less than last year at this time and 11 Bcf above the five-year average of 1,834 Bcf. At 1,845 Bcf, total working gas is within the five-year historical range.