Natural Gas Price Prediction – Prices Consolidate Forming Bull Flag Pattern

Natural gas prices moved higher on Friday but finished the week in the red. The U.S. rig count climbed more than expected up 3 to 104 instead of the 102 expected. The weather is expected to remain warmer than normal on the coasts and in the North but cooler than normal in the south. According to the National Oceanic Atmospheric Administration, there are no disturbances that are expected to become a tropical cyclone over the next 48-hours. U.S. Consumption of natural gas increase in the latest week due to strong power generation demand.

Technical Analysis

Natural gas prices moved higher on Friday but finished the week down 0.4%. Prices continue to form a bull flag continuation pattern which is a pause that refreshes. Resistance is seen near the 10-day moving average at 3.67. Support is seen near the July lows at 3.52. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

Consumption Rose on Power Generation Demand

U.S. consumption increases based on a strong increase in power generation. According to the EIA, total U.S. consumption of natural gas rose by 2.1% compared with the previous report week. Natural gas consumed for power generation climbed by 3.4% week over week, especially in the West. Industrial sector consumption increased by 1.5% week over week. Residential and commercial sector consumption declined by 2.2%. Natural gas exports to Mexico increased 2.3%.