Natural Gas Price Prediction – Prices Rally on Cooler Weather Forecast

Natural gas prices rose on Monday, testing resistance levels. The weather is expected to remain warmer than normal on the West Coast and cooler than normal in the mid-West and East Coast over the next two weeks. Natural gas consumption was down as residential and commercial sectors reduced demand during the holidays.

Technical Analysis

Natural gas prices moved higher on Monday for a second consecutive trading session. Prices tested resistance near the 10-day moving average at 3.85. Support is seen near the December lows at 3.53. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in positive territory with an upward sloping trajectory which points to higher prices.

Consumption Declines

U.S. natural gas consumption decreased last week. According to the EIA, total U.S. consumption of natural gas fell for the second week in a row, by 1.2 Bcf per day compared with the previous report week. In the residential and commercial sectors, consumption declined by 2.8% reported above-normal daytime and nighttime temperatures across most of the United States during the past week. Industrial sector consumption decreased.