Natural Gas Price Prediction – Prices Edge Higher but Close Down for the Week

Natural gas prices moved higher on Friday, rebounding slightly but closing off 2.7% for the week. While inventories declined more than expected the weather for the next 10-days is expected to be mild. The pattern is changing in the 8-14 day forecast, showing a zonal flow of air moving west to east. The cold pocket could continue east, but the last zonal flow saw the cold front break up before it reached the east coast. The weather is expected to be warmer than normal on the east coast for the next 8-14 days. Exports of natural gas increased significantly year over year for November according to a report from the Energy Information Administration.

Technicals

Natural gas prices moved higher on Friday but closed down nearly 2.7% for the week. Prices made a lower high and a lower low which his a sign of a downtrend. Support is seen near the 2016 lows at 1.61. Resistance on natural gas prices is seen near the 10-day moving average at 1.89. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram prints in the red with a declining trajectory which points to lower prices. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal, in oversold territory. The current reading on the fast stochastic is 7, well below the oversold trigger level of 20, which could foreshadow a correction.

LNG Exports Surge

The Energy Information reported in its recently export tally for the US for November. The EIA reported that total exports were 440 Bcf for the month or 14.7 Bcf per day. This volume is up 30.2% compared with 11.3 Bcf per day in November 2018. Natural gas exports were the highest for any month since EIA began tracking monthly exports in 1973. Liquefied natural gas (LNG) continues to drive the year-on-year increase in exports.