Natural Gas Price Prediction – Prices Rise Led by Colder than Normal Weather

Natural gas prices broke out above trend line resistance and are poised to move higher. Colder than normal weather is now forecast to cover most of the United States over the next 6-10 days and then moderate slightly over the next 8-14 days. The northeast is getting hammered with a massive snowstorm on Monday, which is likely to keep the temperature cold in the major cities for the next few days. According to the EIA, Industrial natural gas consumption rose in September and October year over year.

Technical analysis

Natural gas prices moved higher on Monday, breaking out above trend line resistance and poised to test higher levels. Target resistance is seen near the 2.90 level, and then a gap that comes in near 2.95. Support is seen near the breakout level at 2.82. 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 also generated a crossover buy signal slicing through the zero-index line. The MACD histogram is printing in positive territory with an upward sloping trajectory, which points to higher prices. The RSI is also breaking higher, which reflects accelerating positive momentum.

Natural Gas Industrial Demand Rises

According to the EIA, industrial natural gas consumption in September and October 2020 exceeded consumption in those months in 2019. October 2020 consumption of 22.5 billion cubic feet per day was the highest of any October in EIA’s data going back to 2001.