Natural Gas Price Prediction – Prices Drop to Historic All-time Lose Close

Natural gas prices moved lower on Friday as the entire energy sectors tumbled. Prices closed on the lower of the trading session down more than 3.5% closing at the lowest level in history at 1.59 per mmtbu. US natural gas rigs fell only by 1 in the latest week. The total active U.S. rig count, meanwhile, also by 20 to 772, according to Baker Hughes. Almost all of the rig losses this week were in the Permian Basin. The Canadian rig count fared even worse, falling 77 units overall to end at 98, down from 105 in the year-ago period. The oil-directed count fell by 63 units, with 14 gas-directed rigs also packing up shop. Warmer than expected weather is expected to cover the east coast for the next 6-10 and 8-14 days which is likely to weigh on prices.

Technical Analysis

Natural gas prices dropped on Friday falling 3.5%, and collapsing a robust 15% for the week. Support is seen near the all-time lows at 1.55. Resistance is seen near the 10-day moving average at 1.77. Short term momentum has reversed and turned negative after turning positive on Thursday as the fast stochastic generated a crossover sell signal in oversold territory. Medium-term momentum remains negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.

Despite the decline in rig count, supply rose 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 increased by 12% from last week as U.S. exports into Canada declined, according to data from the EIA.