Natural Gas Price Prediction – Prices Close Down for the Week

On Friday, natural gas prices retraced, dropping slightly more than 4% and closing the week in the red. A decline in Dutch natural gas prices put downward pressure on U.S. prices. The weather is expected to be warmer than normal and normal for the next two weeks. There is no tropical activity in the Atlantic that is expected to become a tropical cyclone over the next 48-hours. The natural gas rig count was unchanged in the latest week remaining stable at 99 rigs.

Technical Analysis

Natural gas prices slide on Friday and close down 2% for the week. Resistance is seen near the 10-day moving average at $5.65. Support is seen near an upward sloping trend line that comes in near $5.42. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are oversold as the fast stochastic is printing a reading of 19, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram prints in negative territory with a downward sloping trajectory which points to lower prices.

Consumption Rises

U.S. natural gas consumption increases week over week as a result of rising consumption in the residential/commercial sector and higher feed gas deliveries to LNG export terminals. According to the EAI, total U.S. consumption of natural gas rose by 1.3% compared with the previous report week. Natural gas consumed for power generation declined by 1.2% week over week, which was more than offset by increased consumption in the residential/commercial sector, which rose by 9.2%.