Advertisement
Advertisement

Natural Gas Price Prediction – Prices Surge as Managed Money is Caught Offside

By:
David Becker
Published: Jul 5, 2019, 19:33 UTC

Inventories continue to rise at a steady pace

Natural Gas

Natural gas prices surged higher on Friday as traders became concerned that earthquakes in California could generate a disruption in availability. This comes as warmer than normal weather is expected to cover most of the United States for the next 8-14 days. Additionally, market participants were caught offsides as the most recent commitment of trader’s report released by the CFTC, showed that managed money was short nearly 316K contracts compared to 149K that was long. For the market to cover this number of contracts prices will likely continue to rise.

Technical Analysis

Natural gas prices surged 5% on Friday and settled off session highs. Prices closed at a 5-week high, and broke through resistance seen near the mid-June highs at 2.41. Support on natural gas is seen near the 10-day moving average at 2.28. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The MACD (moving average convergence divergence) index is printing in the black with an upward sloping trajectory which points to higher prices.

EIA Reports Natural Gas Inventories Early

The EIA reported on Wednesday that working gas in storage was 2,390 Bcf as of Friday, June 28, 2019. This represents a net increase of 89 Bcf from the previous week. Expectations were for a 83 Bcf build. Stocks were 249 Bcf higher than last year at this time and 152 Bcf below the five-year average of 2,542 Bcf. At 2,390 Bcf, total working gas is within the five-year historical range.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

Did you find this article useful?

Advertisement