Natural Gas Price Prediction – Prices Rise Following Inventory Report

Natural gas prices moved higher on Thursday following a smaller than expected build in natural gas inventories. The weather is expected to be colder than normal in the northern plains and mid-west over the next 8-14 days but warmer than normal across most of the east coast which could offset any increase in heating demand. There are currently no weather disturbances that are expected to generate a tropical cyclone over the next 48-hours according to the National Oceanic Atmospheric Administration.

Technical Analysis

Natural gas prices moved higher on Thursday, making a lower high and a higher high and rebounding back above resistance near the 10-day moving average at 2.75, which is now seen as short term support. Resistance is seen near the November highs at 2.95. Short-term support has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is neutral as the MACD (moving average convergence divergence) histogram is printing in positive territory with a flat trajectory that points to consolidation.

Natural Gas Inventories Build Less than Expected

Natural gas in storage was 3,877 Bcf as of Friday, October 9, 2020, according to the EIA. This represents a net increase of 46 Bcf from the previous week. Expectations were for a 51 Bcf build according to survey provider Estimize. Stocks were 388 Bcf higher than last year at this time and 353 Bcf above the five-year average of 3,524 Bcf. At 3,877 Bcf, total working gas is above the five-year historical range.