Natural Gas Price Prediction – Prices Slip Following Inventory Report

Natural gas prices whipsawed on Thursday following the Department of Energy’s inventory report. Warmer than average weather is expected to cover most of the United States for the next 2-weeks. This scenario should weigh on natural gas demand. The East Coast of the U.S. is the only area that should experience cooler than normal weather.

Technical Analysis

On Thursday, natural gas prices slipped after testing higher levels. Support is seen near the 10-day moving average at 3.82. Resistance is seen near the 200-day moving average at  4.00. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation.

Natural Gas Stockpiles Decline Less than Expected

According to the Energy Information Administration, natural gas in storage was 3,195 Bcf as of Friday, December 31, 2021. This level represents a net decrease of 31 Bcf from the previous week. Expectations were for a 93 Bcf draw in inventories, according to survey provider Estimize. Stocks were 154 Bcf less than last year at this time and 96 Bcf above the five-year average of 3,099 Bcf. At 3,195 Bcf, the total working gas is within the five-year historical range.