Natural Gas Price Prediction – Prices Rise Hitting Resistance as Momentum Turns Positive

Natural Gas Prices moved higher on Monday, testing resistance levels and rising more than 1.8%. The rally came despite the forecast of moderating temperatures that is expected to move eastward and keep the climate above normal for the next 8-14 days. Demand declined in the latest week as the heating season approaches the end.

Technical analysis

Natural gas prices rallied into the close, settling at the trading session’s highs, up against key resistance levels at 2.58.  A close above this level would lead to a test of the 50-day moving average seen near 2.73. Support is seen near the March lows at 2.42. Short-term momentum has turned positive a the fast stochastic generated a crossover buy signal. Medium-term momentum is negative to neutral as the MACD (moving averaged convergence divergence) histogram is printing in negative territory with a decelerating trajectory which points to consolidation.

Demand Eases

Demand declines as the end of the heating season nears. The EIA reports that, total U.S. consumption of natural gas fell by 3.9% compared with the previous report week. Consumption in the residential and commercial sectors declined by 9.0%. Industrial sector consumption decreased by 1.8% week over week. Natural gas consumed for power generation climbed by 0.5% week over week as lower natural gas prices made natural-gas fueled power generation more competitive.