Natural Gas Price Prediction – Prices Whipsaw Ahead of Inventory Report

Natural gas prices were nearly unchanged on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 27 Bcf draw in stockpiles according to survey provider Estimize. The weather is expected to be much colder than normal in the western part of the US and much warmer than normal on the east coast which should net reduce heating demand. Hurricane Eta is making its way through Latin America and is not expected to move into the Gulf of Mexico. Supply moved lower in the latest week.

Technical Analysis

Natural gas prices whipsawed moving lower and then rebounding holding above support near an upward sloping trend line that comes in near 3.04. Resistance is seen near the 50-day moving average at 3.20. The 10-day moving average is poised to cross below the 50-day moving average which would mean a short-term down trend is in place. Medium-term momentum is negative as the MACD (moving average convergence divergence index recently generated a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.

Supply Edge Lower

Supply edged lower according to data from the EIA. The average total supply of natural gas fell by 0.1% compared with the previous report week. Dry natural gas production decreased by 1.3% compared with the previous report week. Average net imports from Canada averaged 4.6 Bcf/d during the report week, an increase of 31.9% from last week, according to IHS Markit amid heating demand in Midwestern markets.