Natural Gas Price Prediction – Prices Slide Ahead of Inventory Report

Natural gas prices moved lower on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectation are for a 53 Bcf build in natural gas stockpiles according to survey provider Estimze. The weather is also expected to remain cooler than normal over the next 6-10 and 8-14 days according to the latest forecast from the National Oceanic Atmospheric Administration. There are no disturbances that are expected to form tropical cyclones over the next 48-hours.

Technical Analysis

Natural gas prices declined nearly 1% after rising nearly 6% over on Monday and Tuesday. Prices formed an inside day which is a lower high and higher lows that is a sign of indecision. The next level of resistance on natural gas prices is the November highs at 2.91. After this level target resistance is seen near the May highs at 2.98. Support is seen near the former breakout level near 2.73 and then the 10-day moving average at 2.58. Short term momentum is turning negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 85, above the overbought trigger level which could foreshadow a correction. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated 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 signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

LNG Exports Increase

The EIA reports that US LNG exports increase over week. Fourteen LNG vessels with a combined LNG-carrying capacity of 51 Bcf departed the United States between October 24 and October 30, according to shipping data compiled by the EIA. One vessel was loading at the Sabine Pass terminal on Wednesday. One of the tankers loading at Sabine Pass was the Qatari-operated Q-flex tanker. Last report week was the second time a Very Large Qatari tanker loaded LNG in the United States since February 2016