Natural Gas Price Prediction – Prices Consolidate as Storm in the Gulf Brews

Natural gas prices consolidated and moved slightly lower on Thursday in the wake of the Energy Departments’ inventory report. Expectations are for a 79 Bcf build in stockpiles, according to survey provider Estimize. There is a storm in the Gulf of Mexico which the National Oceanic Atmospheric Administration believes has a 90% chance of forming a tropical cyclone in the next 48-hours. The weather is expected to be mild and slightly warmer on the coast over the next 6-10 and 8-14 days, according to NOAA.

Technical

Natural gas prices moved slightly lower on Thursday bouncing near the 10-day moving average at 3.19. Resistance is seen near the June highs at 3.37. Short-term momentum is negative as the fast stochastic generated a crossover sell signal and moved from overbought to neutral. Medium-term momentum is positive but decelerating as the MACD (moving average convergence divergence) histogram print in the black with a declining trajectory points to consolidation.

 Inventories Rise Less than Expected

Natural gas in storage was 2,427 Bcf as of Friday, June 11, 2021, according to the EIA. This represents a net increase of 16 Bcf from the previous week. Expectations were for a 79 Bcf build. Prices should have moved higher. Stocks were 453 Bcf less than last year at this time and 126 Bcf below the five-year average of 2,553 Bcf. At 2,427 Bcf, total working gas is within the five-year historical range.