Natural Gas Price Prediction – Prices Surge Following Storm Destruction

Natural gas prices surged higher on Wednesday ahead of the Thursday inventory report from the Department of Energy. Expectations are for a 29 Bcf build, according to survey provider Estimize. The weather is expected to remain warmer than normal on the West Coast and normal on the East coast over the next 2-weeks. Tropical Storm Larry has formed in the Atlantic and is headed for Bermuda. The ports in the United States and natural gas pumps have stalled without electricity in the region. Stronger than expected manufacturing data helped buoy the contract.

Technical Analysis

Natural gas prices moved higher on Wednesday breaking out and closing up nearly 6%. Target resistance is the 2018 highs near 4.85. Support is seen near the 10-day moving average at 4.13. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Medium-term momentum remains positive as the MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Manufacturing Springs Back to Life

U.S. manufacturing surged back to life in August. The ISM said its index of national factory activity inched up to 59.9 last month from a reading of 59.5 in July. Expectations had been for the index to decline to 58.6. The ISM survey’s forward-looking new orders sub-index rebounded to a reading of 66.7. The survey’s measure of prices paid by manufacturers fell to an eight-month low of 79.4 from a reading of 85.7 in July. This measure has dropped from a record 92.1 in June.