Natural Gas Price Prediction – Prices Rose Ahead of Inventory Report

Natural gas prices moved higher on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 93 Bcf draw in stockpiles, according to survey provider Estimize. Warmer than average weather is expected to cover most of the United States for the next 2-weeks. The East Coast of the U.S. is the only area that should experience cooler than normal weather.

Technical Analysis

On Wednesday, natural gas prices rallied, making a higher high and a higher low. Prices recaptured short-term resistance, which is now supported, near the 10-day moving average at 3.84. Resistance is seen near the December highs at 4.14. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation.

Withdrawals Decline Sharply Last Week

The EIA reported last week that the net withdrawals from storage totaled 88 Bcf for the week ending December 10, compared with the five-year average net withdrawals of 114 Bcf and last year’s net withdrawals of 118 Bcf during the same week. Working natural gas stocks totaled 3,417 Bcf, which is 64 Bcf lower than the five-year average and 326 Bcf lower than last year at this time.