Natural Gas Price Prediction – Prices Slide Despite Cold Weather

Natural gas prices moved lower on Wednesday ahead of Thursday inventory reported from the Department of Energy.
David Becker
Natural gas daily chart, January 30, 2019

Expectations are for natural gas inventories to decline by 176 Bcf according to Estimize. The weather is expected to be colder than normal for the next 8-14 days across the mid-west but that will come after a warm front that follows the current colder than normal weather. Next week there is the possibility that inventories decline by more than 200 Bcf following the record negative temperatures in the mid-west. One Minnesota town had temperatures below -40 degrees below F. The Fed left rates unchanged and had dovish commentary which should buoy commodity prices.

Technical Analysis

Natural gas prices moved lower but held above support near an upward sloping trend line that comes in near 2.87. Resistance is seen near the 10-day moving average at 3.13. Momentum has turned negative as the MACD (moving average convergence divergence index generated a crossover sell 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 red with a declining trajectory which points to lower prices.

The Fed kept interest rates unchanged as the committee focused on the Fed fund rates and the balance sheet. In essence the Fed said that they were in wait and see mode, but the risks are no longer tilted in favor of additional rate hikes. The Fed appears to have capitulated to the markets, and will make decision as they go along. No longer will the balance sheet be on autopilot. The Fed said that they had ample reserves on their balance sheet which means that they could be done with running it off. The Fed also said they would be patient and would be diligent about the runoff in their balance sheet. Yields tumbled on the news, which could buoy commodity prices.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.