Natural Gas Price Prediction – Prices Rise Despite Warm Weather Forecast

Natural gas prices surged on Monday, and the rest of the company complex as the dollar continued t trend lower. Strong demand from manufacturing helped buoy natural gas prices. U.S. Durable Goods orders are stoked by manufacturing demand that has been building since last fall. According to the Commerce Department, new orders for durable goods increased by 0.5% to $256.3 billion in March compared with February. According to the National Oceanic Atmospheric Administration, the rally in natural gas comes despite warmer than expected weather that will cover most of the United States for the next 2-weeks.

Technical Analysis

Natural gas prices moved higher on Monday, rising 2.25% and pushing through resistance. Target resistance is seen near the March highs at 2.91. The 10-day moving average crossed above the 50-day moving average, which means that a medium-term uptrend is now in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought as the current reading on the fast stochastic is 97, above the overbought trigger level of 80, which could foreshadow a correction. Medium-term momentum is also positive as the MACD (moving average convergence divergence) histogram prints in positive territory with an upward sloping trajectory which points to higher prices.

Supplies From Canada Rise

Imports from Canada increase to meet heating demand. According to data from the EIA, the average total supply of natural gas rose slightly by 0.4% compared with the previous report week. Dry natural gas production decreased by 0.9% compared with the last report week, averaging 90.6 Bcf per day. Average net imports from Canada increased by 30.3% from last week. The increase in imports flowed mainly into the midcontinent region as temperatures were far lower than average, increasing heating demand.