Natural Gas Price Prediction – Prices Surge Following Inventory Report
Natural gas prices surged more than 6% on Thursday following the Energy Departments inventory report. Tropical Depression 8 has formed in the Gulf of Mexico and is heading for Texas. This storm could generate issues for several natural gas installations. Tropical Storm Gonzalo is heading for the Caribbean and could also move into the Gulf of Mexico. There is a new disturbance coming off the coast of Africa with a 30% chance of becoming a tropical storm. This trajectory is positive for natural gas prices and natural gas volatility.
Technical Analysis
Natural gas prices surged more than 6% on Thursday and are poised to test resistance near the 50-day moving average at 1.81. A close above this level would lead to a test of the July highs at 1.92. Support is seen near the 10-day moving average at 1.73. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal.
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Inventories Rose Less than Expected
Natural gas in storage was 3,215 Bcf as of Friday, July 17, 2020, according to the EIA. This represents a net increase of 37 Bcf from the previous week. Expectations were for a 45 Bcf build according to survey provider Estimize. Stocks were 656 Bcf higher than last year at this time and 436 Bcf above the five-year average of 2,779 Bcf. At 3,215 Bcf, total working gas is within the five-year historical range.