Natural Gas Price Prediction – Prices Climb on Cold Weather Forecast

Natural gas prices moved higher on Tuesday climbing 1.1%, as colder than normal weather is expected to cover most of the United States for the next 6-10 and 8-14 days. The cold weather is moving down through the mid-west and although it will not be as cold as the polar vortex, prices are now well below the 5-year average for this time of year. Consumption of natural gas rose last week and exports of LNG are now again on the rise.

Technical Analysis

Natural gas prices moved higher rising slightly more than 1% on Tuesday. Prices have bounded near short term support near the 5-day moving average at 2.61, and are poised to test the 20-day moving average at 2.76. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices. Short-term momentum is positive as the fast stochastic generated a crossover buy signal in oversold territory. The current reading of 25, is just above the oversold trigger level of 20, but has only recently crossed into neutral territory which reflects accelerating positive momentum.

Consumption Rose  Last Week

Total U.S. consumption of natural gas rose by 6% compared with the previous report week, according to the EIA. Natural gas consumed for power generation climbed by 11% week over week. Industrial sector consumption increased by 2% week over week. In the residential and commercial sectors, consumption increased by 4%. Natural gas exports to Mexico increased by 6%. U.S. liquefied natural gas exports increase week over week. Exports from Sabine Pass were down last week because of heavy fog restricting transit through the shipping channel, which disrupted operations at the facility.