Natural Gas Price Prediction – Prices Form Bull Flag Pattern

Natural gas prices moved sideways on Wednesday ahead of Thursday’s inventory report by the Department of Energy.  Expectations are for a 51 Bcf build according to estimize. The calendar has moved into the withdrawal season and stocks are well below the 5-year average range.  The weather is expected to be colder than normal for the next 8-14 days and much colder than normal for the next 6-10 days according  to the National Oceanic Atmospheric Administration.

Technical Analysis

Natural gas prices continued to form a bull flag pattern which is a pause that refreshes higher. Prices broke out at the beginning of the week following news that colder weather was making its way into the mid-west of the US and was then shifting over to the east coast.  Support is seen near the former breakout level which coincides with the 20-day moving average at 3.32. Resistance is seen near the 2018 highs at 3.66. positive momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in the black with a flattening trajectory which reflects consolidation. The RSI has moved out of oversold territory moving lower from that area which reflects accelerating negative momentum.

Natural Gas Exports Rise

Net natural gas imports which are imports minus exports were minus 65 Bcf, or minus 2.1 Bcf per day, in August 2018, making the United States a net exporter. Total imports were 7.8 Bcf per day, a decrease of 2.4% from the 8.0 Bcf per day in August 2017. Total exports were 9.9 Bcf per day, an increase of 24.3% from the 8.0 Bcf per day in August 2017. The increase in exports continues to be driven by liquefied natural gas. LNG exports in August 2018 were more than twice the level in August 2017. In August 2018, the United States exported 3.0 Bcf per day of LNG to 13 countries.