Natural Gas Price Prediction – Prices Rebound but Demand is Slipping

Inventories were lower than expected this week
David Becker
Crude Oil daily chart, May 24, 2019

Natural gas prices continued to rebound on Friday rising slightly more than 0.75%, following Thursday’s smaller than expected build in natural gas inventories. Demand moved lower in the most recent week, and supply was flat, must these numbers were not reflected by the build in natural gas stockpiles. The weather is expected to become more mild in the 8-14 day forecast, which should weigh on natural gas demand.

Technical Analysis

Natural gas prices whipsawed higher, closing above the most recent breakdown level, and ended the week on a positive note become the long holiday weekened in the US. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal. The fast stochastic has rebounded after being in oversold territory which points to accelerating positive momentum. Medium term momentum is neutral. The MACD (moving average convergence divergence) histogram is printing in the black with a flat trajectory which points to consolidation.

Supply is Flat and Decmand Declines

Supply remains flat, according to the most recent report from the Department of Energy. The EIA reports that the average total supply of natural gas remained the same as in the previous report week, averaging 93.6 Bcf per day. Dry natural gas production decreased by 1% compared with the previous report week. Average net imports from Canada increased by 4% from last week.

Demand falls driven by a large declilne in residential and commercial sectors. Total US consumption of natural gas fell by 3% compared with the previous report week, according to data from the energy information adminstration. Natural gas consumed for power generation climbed by 7% week over week with warm temperatures and cooling demand in the Southeast. Industrial sector consumption decreased by 2% week over week. In the residential and commercial sectors, consumption declined by 17% with moderate temperatures and low demand for heating. Natural gas exports to Mexico decreased by 4%.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.