Natural Gas Price Prediction – Prices Fall to Support Despite Warm Weather Forecast

Natural gas prices whipsawed and close at the session lows, right a short-term support levels. The weather is expected to be much warmer than normal over the next 6-10 and 8-14 days according to the latest report from the National Oceanic Atmospheric Administration. The warmer than normal weather is expected to increase cooling demand during what is generally considered a shoulder period. Storms continue to make their way east to west across the Atlantic but this years pattern is taking storms back out to see as they approach the US east coast.

Technical Analysis

Natural gas prices tumbled and held just above support near the 20-day moving average seen near 2.50. A close below this level would lead to a test of the August highs near 2.30. Resistance is seen near the 10-day moving average at 2.58. Medium term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.

Natural gas Demand was Unchanged in the Latest Week

The EIA reports that US. consumption of natural gas fell by 4% compared with the previous report week with cooler temperatures across most of the country. Natural gas consumed for power generation declined by 5% week over week. Industrial sector consumption decreased by 1% week over week. In the residential and commercial sectors, consumption declined by 1%. Natural gas exports to Mexico decreased 1%.