Natural Gas Price Prediction – Prices Fail to Gain Traction

Traders await Thursday inventory report from the Department of Energy
David Becker
Natural gas daily chart, February 06, 2019

Natural gas attempted to move higher on Wednesday but ran into short term resinstace and was unable to hold on to its gains. By the end of the trading session prices were up slightly but near unchanged on the day. Colder than normal over the west coast of the United States will be offset by warmer than normal weather over most of the east coast. The market is pricing in a reduction in the decline in inventory expected until the middle of February.

Technical Analysis

Natural gas prices moved higher but there was little follow through and prices closed nearly unchanged. Support is seen near the March 2018 lows at 2.55. Additional support is seen near the 2018 lows at 2.50. 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. Prices are oversold. The fast stochastic is printing a reading of 3, below the oversold trigger level of 20 which could foreshadow a correction.

Supply Is Unchanged

According to data from the EIA, the average total supply of natural gas remained the same as in the previous report week, averaging 94.0 Bcf per day. Dry natural gas production remained constant week over week. Average net imports from Canada increased by 7% from last week amid cold weather. Demand rises, driven by the residential and commercial sector. Total U.S. consumption of natural gas rose by 8% compared with the previous report week, according to the EIA. In the residential and commercial sectors, consumption increased by 11%, reaching a near-record high of 70.9 Bcf per day on Wednesday, January 30, the second-highest value ever recorded. Natural gas consumed for power generation climbed by 6% week over week. Industrial sector consumption increased by 4% week over week. Natural gas exports to Mexico increased 3%averaging 4.9 Bcf per day reaching a record weekly high.

Please let us know what you think in the comments below

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.