Natural Gas Price Prediction – Prices Drop Ahead of EIA Inventory Report

Natural gas prices moved lower on Wednesday ahead of Thursday inventory report from the Department of Energy. Expectations are for a 68 Bcf build according to survey provider Estimize. This follows a 43 Bcf build last week according to the Energy Information Administration. The weather is expected to remain colder than normal on the east coast of the US for the next two weeks while becoming warmer than normal throughout most of the west coast. US GDP came in weaker than expected with Q1 showing a 4.8% contraction the weakest quarterly growth figure since 2008.

Technical Analysis

Natural gas prices dropped 4% on Wednesday, pushing through Tuesday’s lows en route to support levels which are an upward sloping trend line that comes in near 1.80. Resistance is seen near the 10-day moving average at 1.92. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram has crossed the zero-index level which is also a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.