Natural Gas Price Prediction – Prices Drop and Remain Oversold

Natural gas prices continue to decline falling more than 4% breaking through key support. Prices closed on the lows of the trading session. Warmer than normal weather is expected to cover most of the United States over the next 8-14 days. Prices are expected to be cooler than normal in the south and warmer than normal in the north. Supply was flat month over month as domestic US production declined.

Technical Analysis

Natural gas prices broke down on Monday, falling through trend line support as negative momentum accelerates. Support is seen near the January lows at 2.41. Resistance is seen near the breakdown level at 2.54. The 10-day moving average crossed below the 50-day moving average, which means at the medium-term downtrend is now in place. Momentum is negative as the MACD (moving average convergence divergence) histogram is printing in negative territory with a downward sloping trajectory which points to lower prices. Prices are oversold. The fast stochastic is printing a reading of .97, well below the oversold trigger level of 20 which could foreshadow a correction.

Supply is Neutral

Supply stays relatively flat as increased imports compensate for a slight decline in domestic production. The average total supply of natural gas fell by 0.1% compared with the previous report week. Dry natural gas production decreased by 0.3% compared with the previous report week. Average net imports from Canada increased by 4.5% from last week.