Natural Gas Price Prediction – Prices Rise on Warm Weather Forecast

Natural gas moved higher on Friday and finished the week up 7.1%. According to the National Oceanic Atmospheric Administration, warmer than normal weather is expected to cover most of the United States for the next 8-14 days. This warmer than normal weather is likely to induce additional cooling demand. Total supply was mostly flat in the latest week while demand was on the rise.

Technical Analysis

Natural gas prices moved higher on Friday, finishing the week up 7%. Target resistance is seen near the February highs at 3.06. 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 negative, but has been whipsawing as the fast stochastic generated a crossover sell signal. 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.

Supply Remains Flat

Total supply of natural gas remains mostly flat. According to data from the EIA, the average total supply of natural gas rose slightly by 0.3% compared with the previous report week. Dry natural gas production grew by 0.9% compared with the previous report week. Average net imports from Canada decreased by 9.5% after a large increase last week. Net imports from Canada averaged 4.7 Bcf/d this week compared with 5.1 Bcf/d last week and 3.8 Bcf per day for this week last year.