Natural Gas Price Prediction – Prices Rebounded and Settle Near Highs

Key Insights

• Natural gas dropped sharply.
• The weather is expected to be warmer than usually throughout the South.
• U.S. Natural Gas Supply was flat this week.

Natural gas prices rebounded sharply and settled near the highs of the trading session. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal during the next 6-10 days throughout most of the South. Natural gas demand was mixed last week.

  U.S. natural gas demand was mixed last week. According to the EIA, total U.S. consumption of natural gas rose by 1.0% compared with the previous report week, led by a 3.9% increase in natural gas consumed for power generation. Industrial sector consumption of natural gas decreased by 0.7%, and consumption in the residential and commercial sectors decreased by 1.6%.

Technical Analysis

On Tuesday, natural gas prices rebounded sharply after falling 11% on Monday. Prices slid another 8% before recovering to close the session up 3.6%. Resistance near the 20-day moving average at 7.32. Target support is seen near the 50-day moving average at 6.07.

Medium-term momentum has turned negative. The MACD (moving average convergence divergence) generated a crossover sell signal. This situation occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal.