Natural Gas Price Prediction – Prices Rise Following Inventory Build

Natural gas prices moved higher on Thursday following the Department of Energy’s inventory report. The weather is expected to be colder than normal for the next 2-weeks especially in the mid-west according to the latest weather forecast from the National Oceanic Atmospheric Administration. There are no disturbances that are expected to become tropical cyclones over the next 48-hours according to NOAA.

Technical Analysis

Natural gas prices rallied another 2.65% following Tuesday nearly 7% rise. Support is seen near the 10-day moving average at 2.7. Resistance is seen near the September highs at 3. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is poised to turn positive as the MACD (moving average convergence divergence) line is poised to generate 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 line (the 9-day moving average of the MACD line).

Inventories Rise In Line with Expectations

Natural gas in storage was 3,680 Bcf as of Friday, September 18, 2020, according to the EIA. This represents a net increase of 66 Bcf from the previous week. Expectations were for a 67 Bcf build according to survey provider Estimize. Stocks were 504 Bcf higher than last year at this time and 407 Bcf above the five-year average of 3,273 Bcf. At 3,680 Bcf, total working gas is above the five-year historical range.