Natural Gas Price Prediction – Prices Rise on Large Rig Count Drop

Natural gas prices rebounded on Friday following a larger than expected reduction in the number of natural gas rigs was reported by Baker Hughes. Expectations were for gas rigs to fall by one rig. Oil rigs also decline rapidly by 66 rigs. The majority of the losses this week came from Texas, where operators pulled 40 rigs out of operation. Texas, home to most of the Permian Basin, represents about half the nation’s oil and gas rigs. The total number of US oil and gas rigs continued to nosedive this week, plunging by 73 operating rigs.

Technical Analysis

Natural gas prices rallied sharply and recaptured resistance near the 10-day moving average at 1.71, which is now seen as support. Resistance is seen near the April highs at 1.92. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is turning positive as the MACD histogram is beginning to accelerate higher with an upward sloping trajectory.

Exports Rise

LNG exports rose week over week, according to the EIA. Seventeen LNG vessels with a combined LNG-carrying capacity of 61 Bcf departed the United States between April 9 and April 15, 2020, according to the EIA. This was offset by a larger than expected storage injection this week. Net injections into storage totaled 73 Bcf for the week ending April 10, compared with the five-year average net injections of 27 Bcf and last year’s net injections of 73 Bcf during the same week.