Natural Gas Price Prediction – Prices Slide Following Inventory Report

Natural gas prices continued to trading in a tight range, unable to break out or break down. This followed a slightly less than expected build in natural gas inventories reported on Thursday by the Energy Information Administration. The weather is expected to be colder than normal over the next 6-10 days in the East Coast and the mid-Atlantic. Energy production in the U.S fell 5% in 2020. Total production of energy in the United States fell to just below 96 quadrillion British thermal units.

Technical Analysis

Natural gas prices moved lower on Thursday after testing resistance levels and failing. Target resistance is seen near the February highs at 3.06. Short-term resistance is seen near an upward sloping trend line that comes in near 2.97. Support is seen near the 10-day moving average at 2.92. The 10-day moving average crossed above the 50-day moving average, which means that a medium-term uptrend is now in place. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive but decelerating as the MACD (moving average convergence divergence) histogram prints in positive territory with a sliding trajectory which points to consolidation.

Natural gas in storage was 1,958 Bcf as of Friday, April 30, 2021, according to the EIA. This represents a net increase of 60 Bcf from the previous week. Expectations were for a 65 Bcf build in stockpiles according to survey provider Estimize. Stocks were 345 Bcf less than last year at this time and 61 Bcf below the five-year average of 2,019 Bcf. At 1,958 Bcf, total working gas is within the five-year historical range.