Natural Gas Price Prediction – Prices Fall and Form Bear Flag

Natural gas prices continue to form a bear flag pattern. After tumbling prices consolidate and then begin to rebound.  This is a pause that refreshes lower. The weather pattern is changing slightly as cold weather is moving into the West Coast, which appears to be a normal zonal flow. On the East Coast and mid-West, the weather is expected to be much warmer than normal during the next 2-weeks. This phenomenon should weigh on natural gas demand.

Technical Analysis

Natural gas prices formed a bull flag pattern that is pause that refreshes lower. Momentum is negative as the MACD (moving average convergence divergence) histogram is printing in negative territory with a downward sloping trajectory which points to lower prices. Prices are oversold. The fast stochastic is printing a reading of 10, well below the oversold trigger level of 20. Short-term momentum is positive as the fast stochastic generated a crossover buy signal.

Consumption Was Flat

According to the EIA, U.S. natural gas consumption remains unchanged week over week. The U.S. consumption of natural gas fell by 0.4% compared with the previous report week. Consumption fell in all sectors except the power generation sector, which rose by 2.5% week over week. Industrial sector consumption decreased by 0.5%.