Natural Gas

Natural Gas Price Prediction – Prices Break Out and are Poised to Test Higher Levels

Natural gas prices broke out and surged on Wednesday ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 39 Bcf build in natural gas stockpiles according to survey provider Estimize. The weather is expected to be much colder than normal throughout the west and mid-west over the next 6-10 days and then it’s expected to moderate as the cold weather moves east. There is one disturbance in the Caribbean that is moving toward the Gulf of Mexico, with a zero chance of turning into a tropical cyclone over the next 48-hours. Natural gas deliveries for LNG declined in the latest week according to the EIA.

Technical Analysis

Natural gas prices broke out on Wednesday helped by the declining dollar and a colder weather forecast. Prices are now poised to test target resistance near 3.66. Support is seen near the trend line breakout level at 2.95.  The relative strength index (RSI) also pushed higher in tandem with price action which reflects accelerating positive momentum. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.

LNG Deliveries Decline in the Latest Week

Natural gas deliveries to U.S. liquefied natural gas export facilities averaged 6.6 Bcf/d, or 0.7 Bcf per day lower than last week. A force majeure on the Creole Pipeline Trail that feeds the Sabine Pass LNG facility has been in effect since Monday, reducing flows to the terminal by an estimated 1.5 Bcf/d, according to the EIA.