Natural Gas Price Prediction – Prices Rise on Weak Inventory Build

Natural gas prices continued to rally on Thursday following the Energy Information Administration’s report on inventories. The weather is expected to be warmer than average on the West Coast and cooler than average in the  North East for the next two weeks. There are no anticipated disturbances to become tropical cyclones in the Atlantic or Gulf of Mexico over the next 48-hours. Production declined in the latest week.

Technical Analysis

Natural gas prices were higher on Thursday rising more than 3%. Support is seen near the 10-day moving average near 3.92. Resistance is seen near the July highs at 4.19. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a sliding trajectory that points to consolidation.

Inventories Rise Less than Expected

According to the EIA, natural gas in storage was 2,714 Bcf as of Friday, July 23, 2021. This build represents a net increase of 36 Bcf from the previous week. Expectations were for inventories to rise by 47 Bcf according to survey provider Estimize. Stocks were 523 Bcf less than last year at this time and 168 Bcf below the five-year average of 2,882 Bcf. At 2,714 Bcf, total working gas is within the five-year historical range.