Natural Gas Price Prediction – Prices Consolidate Despite Cold Weather

Natural Gas prices whipsawed again despite declining inventories and a cold weather forecast. Prices made a lower low and were unable to hold up at elevated levels. The weather is expected to much colder than normal over the next 6-10 days and then colder than normal, moderating slightly during the 8-14 days over most of the United States. Demand rose in the latest week according to the EIA.

Technical Analysis

Natural gas prices whipsawed trying to move lower but failed to gain traction and consolidated. Support is seen near the 10-day moving average at 2.84. Resistance is seen near the February highs at 3.06. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in positive territory with a declining trajectory which points to consolidation.

Demand Rose

Demand rises driven by demand for space heating. According to data from the EIA, total U.S. consumption of natural gas rose by 3.6% compared with the previous report week. Natural gas consumed for power generation declined by 2.5% week over week. In the residential and commercial sectors, consumption increased by 7.9%. Industrial sector consumption increased by 3.2% week over week. Natural gas exports to Mexico increased 3.5%.