Natural Gas Price Prediction – Prices fell sharply as the weather is projected to cool

Key Insights

• Natural gas prices moved lower.
• The weather is expected to be cooler than normal throughout most of the U.S.
• Production remains close to highs.

On Friday, natural gas prices reversed their uptrend after four consecutive trading sessions of gains. According to the National Oceanic Atmospheric Administration, the weather is expected to be cooler during the next 6-10 days and 8-14 days throughout most of the US.

However, the weather is expected to become warmer in June, giving prices a bullish outlook.

According to the EIA, demand for natural gas has been lagging below the five-year levels as the weather has been cooler than normal. Weather-driven demand has lagged about 1.2 Bcf below five-year average levels.

Technical Analysis

On Friday, natural gas prices despite their having an upward outlook. Prices hover near the $8 region. Prices tested the 10-day moving average of 7.8 before rebounding to the 8.05 level. Short-term momentum turned negative as the fast stochastic generated a crossover sell signal.

Medium-term momentum is negative. The MACD (moving average convergence divergence) histogram prints in neutral territory with a rising trajectory, meaning range-bound trade action.