Natural Gas Price Prediction – Prices Whipsaw and Trade Lower

Natural gas prices moved sideways and whipsawed following Thursday’s inventory report from the Department of Energy. The weather pattern shows cold weather in their planes and the East coast, while the weather will be warmer than normal in the mid-West and much hotter than normal in Texas. That should increase cooling demand in Texas at a time of year that is normally milder.

Technical Analysis

Natural gas prices continue to form a bull flag pattern that is a pause that refreshes lower. Resistance is seen near the 10-day moving average at 3.81. Support is seen near the December lows at 3.65. Momentum is consolidating as the MACD (moving average convergence divergence) histogram is printing in negative territory with a rising trajectory which points to consolidation. Prices are oversold. The fast stochastic is printing a reading of 9, well below the oversold trigger level of 20. Short-term momentum is positive as the fast stochastic generated a crossover buy signal.

Inventories Declined More than Expected

According to the EIA, natural gas in storage was 3,417 Bcf as of Friday, December 10, 2021. This represents a net decrease of 88 Bcf from the previous week. Expectations were for a 69 Bcf draw in stockpiles, according to survey provider Estimize. Stocks were 326 Bcf less than last year at this time and 64 Bcf below the five-year average of 3,481 Bcf. At 3,417 Bcf, total working gas is within the five-year historical range.