Natural Gas Prices Rise Ahead of Inventory Data

Insight

Natural gas prices moved higher Wednesday ahead of Thursday’s inventory report. Trading remains rangebound as the weather remains subdued during the shoulder season.

According to a report from NOAA, the weather in the U.S. is expected to be warmer than normal throughout most of the United States for the next 6-10 and 8-14 days. U.S. consumption was down week over week. The Fed raised interest rates on Wednesday for the first time in more than 3-years.

According to survey provider Estimize, natural gas inventories are expected to decline by 99 Bcf. This decline would generate a further lower trajectory for inventories. Demand declined last week and warm weather is likely to generate headwinds for prices.

Technical Analysis

Natural gas prices rose on Wednesday. Support is seen near the 200-day moving average at 4.39. Resistance is seen near a downward sloping trend line that comes in near 5.25.

Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is above to turn negative. The MACD (moving average convergence divergence) index is making a crossover sell signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average, crosses below the 9-day moving average of the MACD line.