Natural Gas Price Prediction – Prices Consolidate as Production Rises

Natural gas prices were nearly unchanged on Friday after rallying 2% on Thursday and closing the week up 1.2%. Prices were buoyed by a larger than expected draw in stockpiles reported on Thursday by the Department of Energy. This draw was greater than expected. Warmer than normal weather is expected to cover most of the United States over the next 2-weeks according to the National Oceanic Atmospheric Administration.

Technical Analysis

Natural gas prices were unchanged on Friday and are still forming a bear flag pattern which is a pause that eventually refreshes lower. Resistance is seen near the top of a gap in mid-March at 2.58. Support is now seen near the 10-day moving average at 2.53. Additional support is seen near the March lows at 2.42. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term negative momentum is decelerating as the MACD histogram is printing in negative territory with a rising trajectory and poised to generate a crossover buy signal.

U.S. Production Climbs

U.S. production continues to rise. According to data from the EIA, the average total supply of natural gas rose by 0.1% compared with the previous report week. Dry natural gas production grew by 0.4% compared with the previous report week to average more than 91.1 Bcf per day, the highest level since the first week of January. Production growth was strongest in the Rockies, where the prior week’s output was depressed as a result of well freeze-offs caused by low temperatures and a major snowfall in the region.