Natural Gas Price Prediction – Prices Rise 5% for the Week

Natural gas prices whipsawed but finished higher on the trading session. The weather is expected to be warmer than normal throughout most of the east coast and mid-west for the next 2-weeks but cooler on the west coast. Overall this should reduce heating demand. In the wake of record-low temperatures affecting most of the country, dry natural gas production in the United States fell by 21.0 billion cubic feet per day

Technical Analysis

Natural gas prices whipsawed, but finished higher and closed the week up 5% . Resistance is seen near the February highs at 3.32, while support is seen near the 10-day moving average at 2.98. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The RSI (relative strength index) was overbought and has moved into the neutral range which reflects accelerating negative momentum. 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.

Cold Weather Lifts Prices

The unusually strong winter season has led to robust heating and power demand for natural gas, combined with the sudden decrease in natural gas production, led to large price increases at many natural gas hubs this week. The price of natural gas at the Waha Hub, near natural gas production activities in the Permian Basin, rose to over $206 per million British thermal units (MMBtu) on February 16, according to Natural Gas Intelligence (NGI), the highest since 1995.