Natural Gas Price Prediction – Prices Slump Following Inventory Build

Inventories rose more than expected
David Becker
Offshore Jack Up Rig in The Middle of The Sea

Natural gas prices continue to decline on Thursday dropping 1.2% and closing on the lows of the trading session. This comes following a larger than expected build in natural gas inventories according to the US Department of Energy. There are three storms that have a small chance of beginning a tropical cyclone that are twirling in the Atlantic. The weather is expected to remain normal for the next 8-14 day, keeping natural gas heating demand subdued.

Technical Analysis

Natural gas prices dropped nearly 1.2% on Thursday in the wake of the Department of Energy’s inventory report. Prices continued to break down and pushed through an upward sloping trend line that comes in near 2.21, which is short term resistance. Additional, resistance is seen near the 10-day moving average near 2.30. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The only caveat is that the current reading on the fast stochastic is 6, well below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.

Natural Gas Inventories Rise More than Expected

The Energy Information Administration reported on Thursday that gas in storage was 3,415 Bcf as of Friday, October 4, 2019. This represents a net increase of 98 Bcf from the previous week. Expectations were for inventories to rise by 95 Bcf. Stocks were 472 Bcf higher than last year at this time and 9 Bcf below the five-year average of 3,424 Bcf. At 3,415 Bcf, total working gas is within the five-year historical range.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.