Natural Gas Price Prediction – Prices Consolidate After Testing New Lows

Natural gas prices were nearly unchanged on Monday after testing all-time lows earlier in the day. Prices slumped as riskier assets tumbled but rebounded into the close of the trading session. The weather is expected to be warmer than normal over the next 6-10 and 8-14 days according to the National Oceanic Atmospheric Administration. Demand rose in the latest week driven by a rise in electricity-generating according to the Energy Information Administration

Technical Analysis

Natural gas prices rebounded into the close, rejecting lower level, but prices hit fresh-all time lows at 1.51. Resistance is seen near the 10-day moving average at 1.75. Support is seen near the March lows at 1.51. Short term momentum is neutral as the fast-stochastic moves sideways. The current reading on the fast stochastic is 17, which is 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 is printing in the red with a downward sloping trajectory which points to lower prices.

Demand Rise in the Latest Week

Demand increase was driven by gains in the power sector, according to the EIA. US consumption of natural gas rose by 3% compared with the previous report week. Natural gas consumed for power generation climbed by 8% week over week in the low natural gas price environment. Industrial sector consumption increased by 1% week over week. In the residential and commercial sectors, consumption declined overall by 1%. Natural gas exports to Mexico increased by 1%.