Natural Gas Price Prediction – Prices Slip on In-Line Inventory Build

Natural gas prices moved lower on Thursday, following an inline increase in natural gas inventories. The trajectory of the inventory builds since the beginning of the injection season in April, has allowed inventories to build quicker than expected. With the weather expected to remain moderate, inventories are likely going to build for the balance of the shoulder season which will end in June. At the beginning of July, the markets will experience the beginning of the hurricane season, which might drive natural gas prices higher.

Technical Analysis

Natural gas prices moved lower on Thursday and continue to trend lower. Support is now seen near the 2016 lows at 1.65. Resistance on natural gas is seen near the 10-day moving average at 2.52. Short-term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. The fast stochastic has moved from a low of 7, earlier in the week which is below the oversold trigger level of 20f, to 23, which reflects accelerating short-term positive momentum. Medium-term negative momentum is decelerating as the MACD (moving average convergence divergence) index is printing in the red with a rising trajectory which reflects consolidation.

Natural Gas inventories Rose in Line with Expectations

The Energy Information Administration reported on Thursday that working gas in storage was 1,339 Bcf as of Friday, April 19, 2019. This represents a net increase of 92 Bcf from the previous week. Expectations were for natural gas stocks to rise by 91 Bcf according to Estimize. Stocks were 55 Bcf higher than last year at this time and 369 Bcf below the five-year average of 1,708 Bcf. At 1,339 Bcf, total working gas is within the five-year historical range. The trajectory of builds in natural gas inventories continues to point to lower prices.