Advertisement
Advertisement

Natural Gas Price Prediction – Prices Fall Despite Upgrade of Hurricane Delta

By:
David Becker
Published: Oct 6, 2020, 18:58 UTC

Warm weather erodes prices

Natural Gas Price Prediction – Prices Fall Despite Upgrade of Hurricane Delta

Natural Gas prices whipsawed on Tuesday declining 3.8%, after rallying more than 7% on Monday. Hurricane Delta was upgraded to a category 4 storm as it moved into the Gulf of Mexico. The strength of the storm will likely knock out between 25-50% of the US Gulf natural gas production. The decline in prices comes as the weather in the US is expected to be warmer than normal over the next two weeks reducing heating demand.

Technical Analysis

Natural gas prices whipsawed closing on the lows of the trading session. Resistance is seen near the 10-day moving average at 2.65. Support is seen near the October lows at 2.37. The 10-day moving average recently crossed below the 50-day moving average which means a medium-term downtrend is now in place. Momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices for natural gas.

Supply Rises

Supply rises according to the EIA. The average total supply of natural gas rose by 0.6% compared with the previous report week. Dry natural gas production grew by 0.3% compared with the previous report week. Average net imports from Canada increased by 7.5% from last 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.

Did you find this article useful?

Advertisement