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Natural Gas Price Prediction – Prices Ease as Weather Forecast Turns Milder

By:
David Becker
Published: Feb 9, 2021, 19:29 UTC

Demand rises in latest week

Natural Gas Price Prediction – Prices Ease as Weather Forecast Turns Milder

Natural gas prices eased on Tuesday as the 8-14 day forecast showed that the weather would turn slightly milder but remains very cold. The 6-10 days forecast shows that the weather will be freezing throughout the mid-west and shows a ridge trough pattern where cold weather moves south from Canada, pushing cold air down to Texas. Natural gas demand rises in the latest week with increased demand for space heating

Technical Analysis

Natural gas prices eased approximately 1% on Tuesday, testing support levels and making a lower low. Support is seen near the 10-day moving average at 2.79. Resistance is seen near the February highs at 2.79. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in positive territory with a flattening trajectory which points to consolidation.

Demand Rises in Latest Week

Natural gas demand rises with increased demand for space heating. According to data from the EIA total U.S. consumption of natural gas rose by 2.5% compared with the previous report week. On January 28, total consumption reached nearly 124 Bcf per day, the highest level so far this winter. Natural gas consumed for power generation climbed by 3.1% week over week. In the residential and commercial sectors, consumption increased by 2.8%. Industrial sector consumption increased by 1.3% week over week.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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