Natural Gas Price Prediction – Prices Slide 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 31 Bcf increase in natural gas stockpiles survey provider Estimize reports. The weather is expected to be cooler than normal across the East Coast of the United States and warmer than normal across the West Coast. U.S. natural gas consumption increases significantly week over week

Technical Analysis

On Wednesday, natural gas prices tumbled and are poised to test target support near the recent November lows at 4.72. Resistance is seen near the 10-day moving average at 5.15. The 10-day moving average has crossed below the 50-day moving average, which means a short-term downtrend is in place. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are oversold. The fast stochastic is printing a reading of 12, below the oversold trigger level of 20. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram prints in negative territory with a downward sloping trajectory which points to lower prices.

Consumption Rises

U.S. natural gas consumption rose week over week, led primarily by an increase in the residential/commercial sector. According to the EIA, total U.S. natural gas demand rose by 5.7% week over week. The largest increase in demand was in the residential and commercial sector, which rose 31.5% as cooler temperatures prevailed in several country areas ahead of the winter heating season.