Natural Gas Price Prediction – Prices Slip But Form Bull Flag

Natural gas prices moved lower on Tuesday giving back Monday’s gains falling 1.3%. According to a National Oceanic Atmospheric Administration (NOAA) report, the weather is expected to remain warmer than normal for the next 2-weeks, on the East and West Coast with cooler than noral weather in the South.  There is one tropical storms expected to turn into tropical cyclones according to a NOAA forecast in the next 48-hours. U.S. Production declined in the latest week.

Technical Analysis

Natural gas prices eased slightly on Tuesday below resistance which is seen near the July highs, near 2.82. Prices are forming a bull flag continuation pattern which his a pause that refreshes higher. Support is seen near the 10-day moving average at 3.67. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Short-term prices action is negative as the fast stochastic is printing a reading of 78 down from 88, above the overbought trigger level of 80. Medium-term momentum is neutral as the MACD (moving average convergence divergence) histogram is printing near the zero-index level with a flat trajectory which points to consolidation.

U.S. Production Declines

U.S. production of natural gas declines slightly this week. According to data from the EIA, the average total supply of natural gas fell by 0.5% compared with the previous report week. Dry natural gas production decreased by 0.6% compared with the previous report week to average 92.0 Bcf per day, and briefly reached a low of 90.0 Bcf per day over the weekend. Average net imports from Canada increased by 3.0% from last week to 5.0 Bcf per day.