Natural Gas Price Prediction – Prices Slide on Warm Weather Forecast

Natural gas prices moved lower on Monday but finished off the lows of the trading session. January 2021 contract hit an all-time low for the life of the contract. According to NOAA, warmer than usual weather is expected to cover most of the United States for the next 8-14 days. There are no disturbances that are expected to form tropical cyclones over the next 48-hours. Supply was flat in the latest week.

Technical analysis

Natural gas prices tumbled and closed through support levels. Prices pushed through support near the March 2020 lows at 2.42. The next level of target support is seen near the continuation contract lows in September at 1.79. Prices are oversold. The RSI (relative strength index) is printing a reading of 27, below the oversold trigger level of 30, which could foreshadow a correction. The fast stochastic is printing a reading of 4, below the oversold trigger level of 20, indicating a correction. Momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory, which points to lower prices.

Supply is Flat

According to the EIA, the average total supply of natural gas remained the same as in the previous report week, averaging 95.8 Bcf per day. Dry natural gas production decreased by 0.6% compared with the last week report. Average net imports from Canada increased by 14.0% from last week, offsetting the production decline.