Natural Gas Price Prediction – Prices Slip Despite Emergence of Tropical Storm Fred

Natural gas prices moved lower but held key support despite the formation of Tropical Storm Fred that has formed in the Caribbean. A second storm has come off the coast of Africa that has a 30% chance of becoming a tropical cyclone in the next 48-hours. The weather is expected to be warmer than normal throughout most of the north part of the United States for the next 2-weeks. This should increase cooling demand across most of the northern portion of the United States.

Technical Analysis

On Wednesday, natural gas prices moved lower but held support seen near the 10-day moving average at 4.06. Resistance is seen near the August highs at 4.21. Short-term momentum turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum turned negative as the A MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario occurs as the MACD (moving average convergence divergence) index generated a crossover sell signal.

The EIA Forecasts Declines in Inventories

In its Short-Term Energy Outlook, the EIA reported that U.S. natural gas inventories would reach 3,592 billion cubic feet by November 1, the beginning of the winter heating season. This amount is 159 Bcf below its previous five-year average. Above-average withdrawals of natural gas from storage in the 2020–2021 winter heating season and below-average injections into storage this summer contributed to our forecast of below-average natural gas inventories, along with relatively flat dry natural gas production and high natural gas exports.