Natural Gas Price Prediction – Prices Break Out Above Trend Line Resistance

Natural gas prices broke out above trend line resistance surging 3.35% and rising significantly for a second consecutive trading session. In addition to the fallout from Hurricane Dorian, there are currently two tropical storms, one in the Gulf of Mexico and one streaking across the Atlantic. NOAA is now tracking tropical storm Ferdinand circling in the Gulf of Mexico. This could create a disruption. In addition, there is a storm coming off Africa, that called Gabrielle which it has maximum sustained winds of 50-miles an hour.

Technical Analysis

Natural gas prices surged higher after breaking through a downward sloping trend line, that is now seen as support at 2.40.  Additional support is seen near the 10-day moving average at 2.25. Target resistance is seen near the July highs at 2.51. Short term momentum is positive as the fast stochastic generated a crossover buy signal. The fast stochastic is currently printing a reading of 97, which is well above the overbought trigger level of 80 which could foreshadow a correction. Medium-term momentum is positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal. This occurs as the MACD line (the 12-week moving average minus the 26-week moving average) crosses above the MACD signal line (the 9-week moving average of the MACD line).

Exports to Mexico set to increase as new pipeline enters service. EIA expects flows to Mexico to increase after Mexico’s utility Comision Federal de Electricidad announced on Tuesday that it had renegotiated contracts with three pipeline companies. The first pipeline to begin operations, within the next few days, will be the 2.6 Bcf/d South Texas-Tuxpan marine gas pipeline, which will ultimately serve 14 power generation plants in Southeast and Central Mexico. U.S. LNG exports decrease week over week. Eight liquid natural gas (LNG) vessels with a combined LNG-carrying capacity of 30 Bcf departed the United States between August 22 and August 28, according to shipping data from the EIA.