Natural Gas Price Prediction – Prices Rise forming Bull Flag

Natural gas prices moved higher on Monday after experiencing a volatile week. The weather is expected to be mixed with warm weather in the East and cooler weather on the West coast. Hurricane Sam and Tropical post-depression continue to swirl in the Atlantic. Continued pipeline constraints are keeping prices elevated.

Technical Analysis

Natural gas prices rebounded slightly on Monday. Prices made a higher high and a higher low and close near highers. Support is seen near the 10-day moving average at 5.40. Resistance is seen near the September highs at 6.32. Short-term momentum has reversed and negative as the fast stochastic generated a crossover sell signal. Medium-term momentum remains positive, but it decelerates as the MACD (moving average convergence divergence) histogram prints in positive territory with a declining trajectory that points to consolidation.

Continuing pipeline constraints keep prices elevated. U.S. consumption declines for the second week in a row, led by lower fuel use in the electric power sector. Total U.S. consumption of natural gas fell by 5.7% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation declined by 13.1%, or 4.3 Bcf/d, week over week as a result of cooler-than-normal temperatures in the south.