Natural Gas Price Prediction – Prices Whipsaw Despite Larger than Expected Inventory Build

Natural gas prices whipsawed but eventually moved higher as a larger than expected build in natural gas inventories was offset by warmer than normal weather which is forecast to cover most of the United States over the next 8-14 days.  Prices surged higher testing resistance near the June highs at 3.05. Support is seen near the 10-day moving average at 2.95 and then an upward sloping trend line that comes in near 2.90. Momentum on natural gas is neutral as the MACD (moving average convergence divergence) histogram is printing near the zero index level with a flat trajectory which reflects consolidation.

Natural Gas inventories Climbed More than Expected

Working gas in storage was 2,004 Bcf as of Friday, June 15, 2018, according to EIA estimates. This represents a net increase of 91 Bcf from the previous week. Expectations were for a climb of 85 Bcf. Stocks were 757 Bcf less than last year at this time and 499 Bcf below the five-year average of 2,503 Bcf. At 2,004 Bcf, total working gas is within the five-year historical range.

National benchmark spot price rises with warmer temperatures over much of the Lower 48 states. This report week from Wednesday, June 6 to Wednesday, June 13, the Henry Hub spot price for next-day delivery rose 9¢ from $2.85/MMBtu last Wednesday to $2.94/MMBtu yesterday. According to data from the National Oceanic and Atmospheric Administration (NOAA), most parts of the Lower 48 states are expected to be warmer by as much as 10°F degrees Fahrenheit in some parts of the country, compared to last Thursday. The average price for the report week increased only 2¢, from $2.88/MMBtu last report week to $2.90/MMBtu this report week. Over the entire report week, most areas of the Lower 48 states over this report week had average temperatures within a few degrees of the average temperatures last report week.