Natural Gas Price Prediction – Prices Rise Following Inventory Report

Natural gas prices rebounded sharply on Thursday following a larger than expected decline in natural gas inventories. This comes despite a weather forecast that shows that the US’s climate is expected to be warmer than normal over the next two weeks, likely reducing heating demand. There are no disturbances that are expected to turn into tropical cyclones over the next 48-hours according to NOAA.

Technical Analysis

Natural gas prices rallied 5.5% following a larger than expected draw in stockpiles. Prices are poised to test resistance near the 10-day moving average ate 2.69. Support is seen near the December lows at 2.36. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The RSI moved out of oversold territory with an upward trajectory which points to accelerating positive momentum.

Natural Gas Inventories Draw More than Expected

According to the EIA, natural gas in storage was 3,848 Bcf as of Friday, December 4, 2020. This represents a net decrease of 91 Bcf from the previous week. Expectations were for a 78 Bcf draw according to survey provider Estimize. Stocks were 309 Bcf higher than last year at this time and 260 Bcf above the five-year average of 3,588 Bcf. At 3,848 Bcf, total working gas is within the five-year historical range.