Natural Gas Prices Slip Ahead of Inventory Report

Insight

Natural gas prices continue to move lower on a warm weather forecast. The decline in prices comes ahead of Thursday’s inventory report from the Department of Energy.

According to survey provider Estimimze, expectations are for a 149 BCF draw in stockpiles. 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.

According to the EIA, U.S. natural gas production will continue to increase through 2050. Growth is expected to come from natural gas production resulting from rising demand for U.S. natural gas exports, especially for liquefied natural gas

Technical Analysis

Natural gas prices dropped on Wednesday. Support is seen near the 200-day moving average at 4.34. Resistance is seen near the 10-day moving average at 4.64.

Short-term momentum has turned negative as the fast stochastic generated a crossover sell 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.