Natural Gas Price Prediction – Prices Slip Following Inventory Build

Natural gas prices edged lower on Friday, following Thursday’s larger than expected build in natural gas inventories.  The EIA reported at 91 Bcf build compared to expectations that inventories would rise 85 Bcf. Warmer than normal weather is forecast to cover most of the United States for the next 8-14 days. This should buoy cooling demand. Support is seen near the upward sloping trend line near 2.90. Short term resistance is seen near the 10-day moving average at 2.95. Additional resistance is seen near the June highs at 3.05. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints near the zero-index level with a flat trajectory which reflects consolidation.

U.S. LNG exports increase week over week

Five LNG vessels with combined LNG-carrying capacity 18.7 Bcf, departed the United States from June 14 through June 20 three from the Sabine Pass liquefaction terminal and two from Cove Point terminal. One tanker LNG-carrying capacity 3.6 Bcf was loading at the Sabine Pass terminal on Wednesday. Train 3 at the Sabine Pass liquefaction terminal, which has been shut down since May 16, reportedly returned to full production around June 14, according to Genscape. Natural gas feedstock to the facility has increased to 3.0 billion cubic feet per day on Monday, after averaging 2.2 Bcf/d since May 15, according to data by the EIA.

Net injections rise higher than the five-year average. Net injections into storage totaled 91 Bcf for the week ending June 15, compared with the five-year  average net injection of 83 Bcf and last year’s net injections of 63 Bcf during the same week. Net injections averaged 13.7 Bcf/d and will have to average 12.6 Bcf/d for the remainder of the refill season to match the five-year average level (3,815 Bcf) by October 31. Working gas stocks totaled 2,004 Bcf, which is 499 Bcf lower than the five-year average and 757 Bcf lower than last year at this time.