Natural Gas Price Prediction – Prices Consolidate Following Monday’s Breakout as Laura Forms a Hurricane

Natural gas prices moved sideways on Tuesday as Tropical Storm Laura was upgraded to a category one hurricane. Prices tested support and remain buoyed in an upward trend, as 45% of the US Gulf of Mexico natural gas production has now been taken offline. The saving grace has been the weaker than normal demand due to the spread of COVID-19, which has kept prices capped. Laura is expected to slam into Port Author Louisiana when it reaches landfall as a category two hurricane, which could alter production for at least 2-weeks. The weather through the upper-midwest is expected to become cooler than normal which could bring on early heading demand in many regions buoying the price of natural gas.

Technical analysis

Natural gas prices consolidated its Monday’s gains, after its robust breakout and appears to be holding above trend line support which is former resistance seen near 2.46. Resistance is seen near the November 2018 highs at 2.90. Additional support is seen near the 10-day moving average at 2.37. Short-term momentum is flat, as the fast stochastic recently generated a crossover sell signal but is moving sideways. The current reading on the fast stochastic is 87, above the overbought trigger level of 80, which could foreshadow a correction. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.