Natural Gas Price Prediction – Prices Slip Ahead of Inventories Numbers

Natural gas prices moved lower on Tuesday, and was unable to capture resistance. Demand is likely expected to move lower given the normal weather forecast that is expected to cover most of the United States for the next 2-weeks. There is also no expected tropical weather expected in the Atlantic over the next 48-hours which is keeping prices capped.

Technical Analysis

Natural gas prices moved lower on Tuesday but continue to remain range bound. Medium term momentum is neutral as the MACD (moving average convergence divergence) histogram is printing near the zero index level with a flat trajectory which reflects consolidation. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 40, which is in the middle of the neutral range and reflects consolidation.

Inventories Continue to Rise

Natural gas analysts estimates of the weekly net change from working natural gas stocks ranged from net injections of 95 Bcf to 111 Bcf, with a median estimate of 100 Bcf. The average rate of net injections into storage is 39% higher than the five-year average so far in the refill season which is April through October. If the rate of injections into storage matched the five-year average of 9.2 Bcf per day for the remainder of the refill season, total inventories would be 3,521 Bcf on October 31, which is 171 Bcf lower than the five-year average of 3,692 Bcf for that time of year.