Natural Gas Price Prediction – Prices Edge Higher as Storm Develops in Caribean

Natural gas prices rebounded on Tuesday as tropical cyclone Six formed in the Caribbean. A second storm has come off the coast of Africa that has a 10% chance of becoming a tropical cyclone in the next 48-hours. The weather is expected to be warmer than normal throughout most of the north part of the United States for the next 2-weeks. This should increase cooling demand across most of the northern portion of the United States.

Technical Analysis

On Tuesday, natural gas prices moved higher bouncing at support seen near the 10-day moving average at 4.06. Resistance is seen near the August highs at 4.21. Short-term momentum turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum turned negative as the A MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario occurs as the MACD (moving average convergence divergence) index generated a crossover sell signal.

U.S. Consumption is Likely to Fall

The EIA estimates that U.S. consumption of natural gas will average 82.5 billion cubic feet per day in 2021, down 1.0% from 2020. U.S. natural gas consumption declines in the forecast, partly because electric power generators switch to coal from natural gas due to rising natural gas prices. In 2021, the EIA expects residential and commercial natural gas consumption combined will rise by 1.2 Bcf per day from 2020, and industrial consumption will rise by 0.2 Bcf per day from 2020.