Natural Gas Price Prediction – Prices Rise but Remain Rangebound as Momentum Turns Positive

Natural Gas prices have whipsawed higher but remain in a consolidative tone. Prices rallied nearly 4%, as the weather is expected to be cooler than normal throughout the south of the US. There is one storm in the Atlantic Ocean that has a 40% chance of becoming a tropical cyclone. Demand is on the rise driven by heating demand in buildings.

Technical Analysis

Natural gas prices moved higher on Monday but remain rangebound. Support is seen near the 10-day moving average at 2.85. Resistance is seen near the late November highs at 3.0. Medium Term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Demand Rose in the Latest Week

Total US consumption of natural gas rose by 22.8% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation rose by 2.6% week over week. In the residential and commercial sectors, consumption climbed by 81.9% with temperatures across the Lower 48 states generally averaging between 40 and 60 degrees Fahrenheit. Industrial sector consumption increased by 5.8% week over week. Natural gas exports to Mexico increased 1.1%.