Natural Gas Price Prediction – Prices Fall on Warm Weather

Natural gas prices dropped nearly 5% on Monday. The move comes as warmer than normal weather is expected to cover most of the United States for the next 6-10 and 8-14 days according to the National Oceanic Atmospheric Administration. U.S. demand declines again week over week due to mild temperatures.

Technical Analysis

Natural gas prices dropped on Monday and pushing through support near the 10-day moving average at 2.57 which is now seen as resistance. Target support is seen near the March lows at 2.42. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal.

U.S. Demand Declined

U.S. demand declines again week over week due to mild temperatures. Total U.S. consumption of natural gas fell by 6.0% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed 1.4% week over week. Industrial sector consumption decreased 1.9% week over week. The largest decrease in consumption came from the residential and commercial sectors, where consumption declined by 17.1% due to above-average temperatures and low heating demand in the eastern United States for much of last report week.