Natural Gas Price Prediction – Prices Surge Closing at 6-week High

Natural gas prices rebounded sharply on Wednesday reversing Tuesday declines and surging 6.6%. Prices closed at a new high for April and closed at a 6-week high. This comes ahead of Thursday inventory report scheduled to be released on Thursday. Expectations are for inventories to rise by 53 Bcf according to survey provider Estimize. This follows a larger than expected 72 Bcf build reported by the Energy Information Administration last week. The weather is expected to remain colder than normal on the east coast for the next 2-weeks and warmer than normal on the west coast of the United State for the next 2-weeks.

Technical Analysis

Natural gas prices reversed Tuesday’s decline rising 6.6% after falling nearly 5% on Tuesday and rising by 12%, on Monday. Prices closed at a fresh 6-week high, and are poised to test resistance near the March highs at 2.04. Support is seen near the 50-day moving average at 1.80. The 10-day moving average is poised to cross through the 50-day moving average which would mean a short-term uptrend would be considered in place.

Short term momentum has turned positive as the fast stochastic surges higher after recently generating a crossover buy signal. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) histogram is printing in the red with an upward sloping trajectory which points to higher prices. Short term momentum is also positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 93, above the overbought trigger level of 80 which could foreshadow a correction.