Natural Gas Price Prediction – Natural Gas Bounced Slightly

Natural gas prices moved higher on Monday, likely in sympathy with crude oil prices which surged higher due to the termination of Iranian wavers to current buyers. The weather is the US is expected to remain normal over the next 8-14 days, which will likely keep demand steady. Asian natural gas prices have steady but remain under pressure following a warmer than normal weather that covered most of Chinese during the winter.

Technical Analysis

Natural gas prices edged higher on Monday but were unable to pierce through resistance levels. Resistance is seen near the recent breakdown level which came in near 2.54.  Support is seen near the contract low at 2.48. Negative momentum is moderating. The MACD histogram is printing in the red with a flat trajectory which reflects consolidation The fast stochastic also generated a crossover buy signal in oversold territory which points to accelerating positive momentum. The current reading on the fast stochastic is 18, which is below the oversold trigger level of 20, and could foreshadow a correction.

Supply Moved Higher

Supply rises as dry natural gas production grows. According to data from the EIA, the average total supply of natural gas rose by 1% compared with the previous report week. Dry natural gas production grew by 1% compared with the previous report week. Average net imports from Canada increased by 2% from last week.

Total U.S. consumption of natural gas was unchanged from the previous report week, averaging 62.8 Bcf/d according to data from the EIA. Natural gas consumed for power generation declined by 3% week over week. Industrial sector consumption increased by 1% week over week. In the residential and commercial sectors, consumption increased by 2%. Natural gas exports to Mexico have decreased since maintenance on the NET Mexico pipeline in South Texas, which interconnects to the Los Ramones pipeline, began on April 16.