Natural Gas Price Prediction – Prices Slide on Profit Taking Following Hurricane Landfall

Natural gas prices moved lower as traders took profits following the landfall of Hurricane Ida. The hurricane has disrupted about 95% of the natural gas taken from the U.S. Gulf of Mexico. The weather is expected to remain warmer than normal and to get natural gas out of the Gulf will take time as electricity is down across the state. Tropical storm Kate is working its way north in the Atlantic and there is another storm coming off Africa that has a 70% chance of becoming a tropical cyclone over the next 48-hours.

Technical Analysis

Natural gas prices moved lower on Monday as traders took profits following last week’s huge rally. Support is seen near the former breakout level at 4.23. Resistance is seen near the 2018 highs at 4.85. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in positive territory with an upward sloping trajectory which points to higher prices.

The Number of Rigs Declined in the latest Week

According to Baker Hughes, for the week ending Tuesday, August 17, the natural gas rig count decreased by 5 rigs to 97 rigs, and it is now at its lowest level in over two months. Losses were distributed across various basins. This includes the Eagle Ford, Haynesville, and Marcellus all which lost one rig. The Hurricane will likely see even more rigs go down due to the lack of electricity in the area.