Natural Gas Price Prediction – Prices Whipsaw Ahead of Inventory Report

Natural gas prices moved lower on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for stockpiles to climb by 4 Bcf, according to survey provider Estimize. This reading comes a week ahead of the unofficial injection season. The weather is expected to be warmer than normal over the next two weeks, which is likely to reduce heating demand.

Technical Analysis

Natural gas prices whipsawed and moved lower on Wednesday ahead of Thursday’s inventory report. Support is seen near the 10-day moving average at 2.59. Resistance is seen near the 50-day moving average at 2.75. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Inventories are Lower than a Year Ago

Natural gas stockpiles are expected to rise this week. The net withdrawals from storage totaled 36 Bcf for the week ending March 19, compared with the five-year average net withdrawals of 51 Bcf and last year’s net withdrawals of 26 Bcf during the same week. Working natural gas stocks totaled 1,746 Bcf, which is 78 Bcf lower than the five-year average and 263 Bcf lower than last year at this time.