Natural Gas Price Prediction – Natural Gas Rallies Breaking Out to Higher Levels

Natural gas prices moved higher on Friday, pushing through resistance levels and poised to continue to rise. Colder than normal weather which is expected to cover most of the United States over the next 6-14 days is increasing cooling demand. May generally is not a strong demand for heating consumption.

Technical Analysis

Natural gas prices rose slightly more than 1% on Friday and are poised to hit target resistance near the 50-day moving average at 2.685. Support on natural gas is seen near the 10-day moving average at 2.58. This coincides with the prior breakout level. Short term momentum has turned positive as the fast stochastic is accelerating higher. The current reading on the fast stochastic is 87, which is above the overbought trigger level of 80 which could foreshadow a correction. Medium term momentum is neutral as the MACD (moving average convergence divergence) histogram is printing near the zero index level with a flat trajectory which reflects consolidation. The MACD line is nearly on top of the signal line which also reflects consolidation.

Natural Gas Supply was Flat this Week

The Energy Information Administration reported that the average total supply of natural gas remained the same as in the previous report week, averaging 94.4 Bcf per day. Dry natural gas production was unchanged week over week. Average net imports from Canada increased by 6% from last week. Demand falls despite increasing consumption for natural gas-fired power generation. Total U.S. consumption of natural gas fell by 3% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 6% week over week. Industrial sector consumption decreased by 2% week over week. In the residential and commercial sectors, consumption declined by 16% as temperatures trended back to normal. Natural gas exports to Mexico were the same as last week, averaging 4.6 Bcf per day.