Natural Gas Price Prediction – Prices Rise Following Smaller than Expected Inventory Build

Natural Gas prices whipsawed and moved higher, forming an outside day and taking out resistance following a smaller than expected draw in stockpiles. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal over most of the United States for the next 6-10 and 8-14 days.

Technical Analysis

Natural gas prices formed an outside day making a lower low and a higher high before hitting a higher close. This is generally considered a positive sign for price action. Prices eclipsed resistance which now supports near the 50-day moving average at 2.71. Target resistance is seen near the March highs at 2.91. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Prices are also overbought as the fast stochastic prints a reading of 90, above the overbought trigger level of 80 which could foreshadow a correction.

Inventories Rise Less than Expected

Natural gas in storage was 1,883 Bcf as of Friday, April 16, 2021, according to the EIA. This represents a net increase of 38 Bcf from the previous week. Expectations were for a 50 Bcf build in inventories according to survey provider Estimize. Stocks were 251 Bcf less than last year at this time and 12 Bcf above the five-year average of 1,871 Bcf. At 1,883 Bcf, total working gas is within the five-year historical range.