Natural Gas Price Prediction – Prices Fall but Rebound From Lows Ahead of Inventory Report

 

Natural gas prices moved lower on Wednesday but closed well off the session lows. This comes ahead of Thursday’s inventory report from the Department of Energy. Expectations are for 61 Bcf build in stockpiles. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal for most of the East Coast and Mid-Atlantic for the next 6-10 and 8-14 days. The EIA estimates that inventories are ending April 3% lower than the 5-year average.

Technical Analysis

Natural gas prices moved lower on Wednesday but rebounded off the session lows and close near support at the 10-day moving average at 2.97. Resistance on the June contract is seen near the May highs at 3.15. Momentum is negative as the fast stochastic generated a crossover sell signal and moved from overbought levels to the middle of the neutral range. Medium-term momentum is turning negative as the MACD (moving average convergence divergence) index is poised to generate a crossover sell signal.

The EIA estimates that natural gas inventories ended April 2021 at almost 2.0 trillion cubic feet which is 3% lower than the five-year average. Natural gas withdrawals from storage during the winter of 2020–21 were higher than the five-year average, largely due to the cold February temperatures that contributed to a drop in natural gas production. The EIA forecast that natural gas inventories will end the 2021 injection season at more than 3.6 Tcf, which is 3% below the five-year average.