Natural Gas Price Prediction – Prices Slide but Hold Support as Tropical Activity Percolates

Natural gas prices moved lower on broad commodity weakness but rebounded late in the session. The weather is expected to be warmer than normal throughout most of the north part of the United States for the next 2-weeks. There is a storm in the Atlantic that is headed for the Caribbean that has an 80% chance of becoming a tropical cyclone over the next 48-hours, according to a weather report from the National Hurricane Center.

Technical Analysis

On Monday, natural gas prices moved lower but rebounded from support seen near the 10-day moving average at 4.04. Resistance is seen near the August highs at 4.21. Short-term momentum turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 60, dropping from overbought territory. Medium-term momentum turned negative as the A MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario occurs as the MACD (moving average convergence divergence) index generated a crossover sell signal.

Consumption Declines in Latest Week

U.S. consumption of natural gas fell in all sectors this week except in the industrial sector. According to the EIA, mean temperatures dropped substantially across wide sections of the United States last week, resulting in total U.S. consumption of natural gas falling by 3.8%, or 2.6 Bcf per day. Average weekly natural gas consumption for power generation and residential and commercial sectors declined by 7.3% and 2.0% week to week, or 3.0 Bcf per day and 0.2 Bcf per day, respectively.