Natural Gas Price Prediction – Prices Slip but are Oversold
Natural gas prices moved lower and continued to trade in a sideways pattern. The weather pattern shows cold weather in their planes and the East coast, while the weather will be warmer than normal in the mid-West and much hotter than normal in Texas. Power generation is getting a larger share of its energy from natural gas turbines than from water in 2020 compared to 2019 according to EIA estimates.
Natural gas prices continue to form a bear flag pattern that is a pause that refreshes lower. Resistance is seen near the 10-day moving average at 3.77. Support is seen near the December lows at 3.65. Momentum is consolidating as the MACD (moving average convergence divergence) histogram is printing in negative territory with a rising trajectory which points to consolidation. Prices are oversold. The fast stochastic is printing a reading of 9, well below the oversold trigger level of 20. Short-term momentum is positive as the fast stochastic generated a crossover buy signal.
Electric Power Leans Toward Natural gas
The U.S. electric power sector’s cooling water withdrawals fell 10.5% from 53.1 trillion gallons in 2019 to 47.5 trillion gallons in 2020, continuing the downward trend in withdrawals. The decline has been driven by the increased use of renewable and natural gas-fired generation in place of coal-fired generation and less use of once-through cooling technologies.