Natural Gas Price Prediction – Prices Tumble on Surprise Inventory Build

Natural gas prices tumbled following a much larger than expected build in natural gas inventories according to the latest report from the Department of Energy. The weather is expected to be much warmer than normal over the next 6-10 days, but then it will turn cooler reducing cooling demand over the 8-14 day forecast. This is according to the National Oceanic Atmospheric Administration. Storms in the Atlantic are expected to move back out to see after moving west, failing to hit the United States or any Natural Gas infrastructure.

Technical Analysis

Natural gas prices tumbled on Thursday dropping 3.5% and breaking down below support levels. Target support is seen near an upward sloping trend line that comes in near 2.3. Resistance is seen near the 10-day moving average at 2.55. 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). Short term momentum continues to remain negative as the fast stochastic tumbled, falling to a reading of 11, below the oversold trigger level of 20 which could foreshadow a correction.

Natural Gas Inventories Rise More than Expected

The EIA reported that working gas in storage was 3,205 Bcf as of Friday, September 20, 2019. This represents a net increase of 102 Bcf from the previous week. Expectations were for an 85 Bcf build according to surveyor Estimize. Stocks were 444 Bcf higher than last year at this time and 47 Bcf below the five-year average of 3,252 Bcf. At 3,205 Bcf, total working gas is within the five-year historical range.