Natural Gas Price Prediction – Prices Rebound at Trend Line Support

Natural gas prices rebounded from support levels despite a warmer than expected weather forecast. The Department of Energy released its inventory number a day early since it’s a Federal Holiday on Thursday. The 6 Bcf build was slightly smaller than expected, but that did not fail to buoy prices on Wednesday. Natural gas consumption increased week over week.

Technical Analysis

Natural gas prices rebounded on Thursday after dropping below support but recapturing the trend line today near 4.95. Resistance is seen near the 50-day moving average at 5.35. The 10-day moving average crossed below the 50-day moving average which means that a short-term down trend is now in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is negative. The MACD (moving average convergence divergence) histogram is printing in negative territory with a declining trajectory which points to lower prices.

Consumption Rose in the United States

U.S. natural gas use rose significantly week over week, led primarily by an increase in the residential/commercial sector. According to the EIA, total U.S. natural gas demand rose by 5.7% week over week, which marks a second consecutive week of significantly increasing demand. The largest increase in demand was in the residential and commercial sectors.