Natural Gas Price Prediction – Price Rally Rising 8.5% for the Week

Natural gas prices continued to break out Friday on the heels of Thursday’s smaller than expected rise in natural gas inventories. The weather remains stuck in a pattern where there is warmer than normal weather in the west and east coasts and cooler than normal weather in the south. There is one storm in the Atlantic. According to the National Oceanic Atmospheric Administration, it has a 20% chance of turning into a tropical cyclone in the next 48-hours.

Technical Analysis

Natural gas prices broke out and rallied 2.25% finishing the week up 8.5%. Support is seen near the 10-day moving average near 3.30. Resistance is seen near the 2019 highs at 3.72. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Prices are overbought as the fast stochastic is printing a reading of 95, well above the overbought trigger level of 80 which foreshadows a correction. The RSI is printing a reading of 72, above the overbought trigger level of 70, which could foreshadow a correction. Medium-term 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).

U.S. Natural gas exports to Mexico reach record highs.

Total U.S. consumption of natural gas fell by 1.8% compared with the previous report week, according to data from the EIA. High temperatures continued west of the U.S. Rocky Mountains but approached normal this week for the rest of the United States. In response to overall lower air conditioning demand, natural gas consumed for power generation declined by 4.3% week over week. Industrial sector consumption increased by 0.6% week over week. In the residential and commercial sectors, consumption increased by 3.4%. Natural gas exports to Mexico rose 3.0% to 7.0 Bcf per day, a record weekly average.