Natural Gas Price Prediction – Prices Dip Despite Increasing Demand

Natural gas prices dipped but remain in an uptrend as warmer than normal weather is expected to cover most of the U.S. over the next 6-10 days. The next 1-5 days are expected to be especially hot, driving up cooling demand. Electric generation to run air conditioners will potentially cause electrical outages.

Prices are forming a wedge pattern, with support seen near an upward sloping trend line that 2.91.  Resistance is seen near a downward sloping trend line that comes in near 3.03. Momentum is slightly negative as the MACD (moving average convergence divergence) histogram is printing in the red with a slightly downward sloping trajectory which points to lower prices.  Prices are consolidating and the RSI (relative strength index) is printing a reading of 51, which is in the middle of the neutral range and reflects consolidation.

Supply Increased

Average week-over-week supply increases slightly. According to data from the EIA, the average total supply of natural gas rose by 1% compared with the previous report week. Dry natural gas production grew by 1% compared with the previous report week. Average net imports from Canada decreased by 4% from last week.

Overall consumption rises

Overall consumption rises slightly on increased residential and commercial demand. Total U.S. consumption of natural gas rose by 1% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation declined by 3% week over week. Industrial sector consumption increased by 1% week over week. In the residential and commercial sectors, consumption increased by 22%. Natural gas exports to Mexico decreased 3%.

U.S. LNG exports increase week over week. Six LNG vessels combined LNG-carrying capacity 21.7 Bcf departed the United States from June 21 through June 27 all from the Sabine Pass liquefaction terminal. One tanker LNG-carrying capacity 3.6 Bcf was loading at Sabine Pass terminal on Wednesday.