Natural Gas Price Prediction – Prices Fall on Warm Weather Forecast

Natural gas prices broke down on Monday, as warmer than normal weather is forecast to cover most of the United States for the next 2-weeks. Hurricane Iota is in the Caribbean but is unlikely to make its way to the Gulf of Mexico. The Energy Information Administration forecasts lower production in 2020 compared to 2019.

Technical Analysis

Natural gas prices broke down on Monday, pushing through support near an upward sloping trend line that comes in near 2.82 which is now seen as resistance. Support is seen near the July lows at 2.65. The relative strength index (RSI) has turned lower, which reflects accelerating negative momentum. Medium-term momentum is also negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.

EIA Forecasts Lower Production in 2020

The EIA forecasts that U.S. dry natural gas production will average 91.0 Bcf per day in 2020, down from an average of 93.1 Bcf per day in 2019. In the forecast, monthly average production falls from a record 97.0 Bcf per day in December 2019 to 87.0 Bcf per day in April 2021 before increasing slightly. EIA forecasts dry natural gas production in the United States to average 87.9 Bcfper day in 2021.