Natural Gas Price Prediction – Prices Gap Higher but Close near the Lows

Natural gas prices whipsawed on Monday gapping on the open and closing near the lows of the day. There is a disturbance moving across the Caribbean Sea which has a 30% chance of becoming a tropical cyclone in the next 48-hours according to NOAA. The weather is expected to be colder than normal throughout the mid-west for the next 6-10 and 8-14 days according to NOAA which should increase heating demand.

Technical analysis

Natural gas prices whipsawed climbing 3.6%, but closing well off the highs of the trading session as traders took profits near resistance. Support is seen near the 50-day moving average near 2.75. Resistance is seen near the September highs at 3. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices. Short-term momentum has also turned positive as the fast stochastic continues to accelerate higher.

Supply Rose in the Latest Week

Supply rose in the latest week. According to data from the EIA. The average total supply of natural gas rose by 0.5% compared with the previous report week. Dry natural gas production decreased by 0.2% compared with the previous report week amid production shut-ins in the Gulf of Mexico due to Hurricane Delta. Average net imports from Canada increased by 14.8% from last week.