Natural Gas Price Prediction – Prices Rebound Sharply Following Bearish Inventory Report

Natural gas prices rebounded from session lows to close in the black. After testing support down 7% early in the trading day, prices surged higher and closed higher. The move came despite a larger than expected increase in natural gas inventories. The weather is expected to be warmer than normal on the East Coast for the next two weeks but cooler than normal on the West Coast. There is no real tropical activity in the Atlantic.

Technical Analysis

Natural gas prices rebounded from session lows and close above former resistance now short-term support at the 10-day moving average near 5.72. Support is an upward sloping trend line that comes in near 5.13. Below that is the 50-day moving average at 4.66. Resistance is seen near the October highs at 6.46. Momentum is neutral as the fast stochastic continues to flip-flop between buy and sell signals.

Inventories Rise More than Expected

According to the EIA, natural gas in storage was 3,288 Bcf as of Friday, October 1, 2021. This represents a net increase of 118 Bcf from the previous week. Expectations were for a 108 Bcf build according to survey provider Estimize. Stocks were 532 Bcf less than last year at this time and 176 Bcf below the five-year average of 3,464 Bcf. At 3,288 Bcf, total working gas is within the five-year historical range.