Natural Gas Price Prediction – Prices Rise as Weather Forecast Turns Colder
Natural gas prices rebounded on Tuesday, rising 2.2%, ahead of Thursday inventory report from the Department of Energy. Expectations are for inventories to decline by 141 Bcf according to survey provider Estimize. This follows at 92 Bcf draw that occurred last week. The weather is expected to be warmer than normal over the next 6-10 days but then turn slightly cooler of the next 8-14 days.
Technical Analysis
Natural gas prices moved higher on Tuesday but continue to move sideways in a relatively tight range. Prices appear to be forming a bear flag pattern which is a pause that refreshes lower. Resitsdance is seen near the 10-day moving average at 1.98. Support is seen near the January lows at 1.83. Momentum is turning slightly higher. The RSI moved up from oversold territory which reflects accelerating positive momentum. The current reading on the RSI is 31, just above the oversold trigger level of 30. The fast stochastic has also moved up from the oversold trigger level and is moving higher reflecting accelerating short term momentum.
Last week inventories came in lower than expected and this week the market believes there will be another robust decline. The net withdrawal from storage totaled 92 Bcf for the week ending January 17, compared with the five-year average net withdrawal of 194 Bcf and last year’s net withdrawal of 152 Bcf during the same week. Working natural gas stocks totaled 2,947 Bcf, which is 251 Bcf more than the five-year average and 554 Bcf more than last year at this time.
This article was originally posted on FX Empire
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