Advertisement
Advertisement
Natural Gas Price Prediction – Prices Surge as Inventories Drop
By:
Natural gas prices surged higher by slightly less than 1.5% on Friday, as warmer than normal weather is forecast to cover most of the United States for
PREMIUM
Read what the experts are trading this weekExclusive analysis from FXEmpire top analysts — curated insights you won't find on the free site.In-depth analysis
Curated reports
Top analysts
Unlock Premium
Natural gas prices surged higher by slightly less than 1.5% on Friday, as warmer than normal weather is forecast to cover most of the United States for the next 8-14 days. The warm temperatures will increase cooling demand just as inventories have reached critical levels. On Thursday the Department of Energy reported that stocks increased by 35 Bcf compared to the 40 Bcf expected by analysts. Inventories are now below the 5-year average range while prices remain below the 5-year average price of natural gas at 3.14. Prices fell short of taking out resistance near the 50-day moving average at 2.87. Support is seen near the 10-day moving average at 2.78. Momentum on natural gas prices is positive as the MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices. The fast stochastic generated a crossover buy signal which points to accelerating positive momentum.
Natural Gas Supplies Remain Unchanged
The EIA reported this week that natural gas production was unchanged notching up an average total supply of 86.7 Bcf per day. Dry natural gas production remained constant week over week, according to the Department of Energy. Average net imports from Canada decreased by 4% from last week.
The EIA also reported that May set a fresh record of production. In their short-term production report the EIA revealed that May 2018 dry natural gas production averaged 80.4 Bcf per day which was the highest level since EIA began tracking dry natural gas production in 1973. The previous record was 79.5 Bcf per in March 2018 according to the EIA report.
Demand falls
Total U.S. consumption of natural gas fell by 1% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation declined by 4% week over week as temperatures moderated somewhat in the Southwest. Industrial sector consumption stayed constant, averaging 19.9 Bcf per day according to the EIA report. In the residential and commercial sectors, consumption increased by 8% but remains a minor source of consumption during the summer months. Natural gas exports to Mexico increased 2%.
About the Author
David Beckerauthor
David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.
Advertisement