Natural Gas Price Prediction – Prices Slip Rebounding from Their Lows but Momentum Remains Negative

Natural gas prices moved lower on Wednesday but settled well off session lows. Prices started the day down nearly 1.5%, but rebounded throughout the day ahead of Thursday’s inventory report from the Department of Energy. The weather is expected to be warmer than normal in the US for the next 6-10 and 8-14 days which should increase cooling demand. Hurricane Lorenzo and Tropical Storm Karen are moving westward in the Atlantic but the trajectory is expected to take both storms back to sea, without hitting the United States and any infrastructure.

Technical Analysis

Natural gas prices tumbled and then rebounded although it made a lower low and a lower high. Resistance is seen near the 10-day moving average at 2.57. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.

EIA Estimates

The Department of Energy is scheduled to release stockpile estimates on Thursday. Expectations are for inventories to rise by 85 Bcf according to surveyor Estimize. This follows a 84 Bcf increase last week according to figures released by the Energy Information Administration. One of the driving forces could be the rebound in natural gas demand in Asia following last winters softer than expected demand. According to the EIA, Natural gas and petroleum product consumption is rising in Asia faster than supply is growing, potentially shifting trade patterns and infrastructure investments.