Natural Gas Price Prediction – Prices Fall and Downtrend Remain in Tact
Natural gas prices moved lower Friday, despite a larger than expected draw in natural gas inventories reported by the Department of Energy. Inventories declined by 29 Bcd compared to expectations are for inventories to decline by 3 Bcf. This follows at 9 Bcf draw in inventories in the prior week. The weather is expected to remain warmer than normal for the next 2-weeks according to the National Oceanic Atmospheric Administration.
Technical Analysis
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Natural gas prices edged declined on Friday dropping by 1%. Resistance is seen near the 10-day moving average at 1.66. Support is seen near the March lows at 1.52. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The MACD (moving average convergence divergence) histogram is printing in the red with a flat trajectory that points to consolidation. Prices are trading sideways looking for an impetus following a huge decline in short positions. The weekly trend is for lower prices as a lower low and a lower high were made throughout the week.
EIA Inventory Report
The EIA reported on Thursday that working gas in storage was 2,005 Bcf as of Friday, March 20, 2020, according to EIA estimates. This represents a net decrease of 29 Bcf from the previous week. Expectations were for a 3 Bcf draw. Stocks were 888 Bcf higher than last year at this time and 292 Bcf above the five-year average of 1,713 Bcf. At 2,005 Bcf, total working gas is within the five-year historical range.