Natural Gas Price Prediction – Prices Slip but Trend Remains Upward Sloping

Natural gas prices moved lower on Friday after hitting a higher high earlier in the trading session. This came as tropical storm Laura was downgraded to a tropical depression as it moved inland. The storm hit the Louisiana coast as a category 4, storm, the first storm to make landfall with 150 mile and hour winds. The damage was widespread, but officials do not think there will be permanent damage to any natural gas installations. There are currently two new storms coming across the Atlantic at the same trajectory as Laura. Both disturbances have approximately a 20% chance of becoming a tropical cyclone in the next 48-hours according to NOAA. The weather is expected to remain cooler than normal throughout the mid-west over the next 2-weeks potentially increasing heating demand.

Technical Analysis

Natural gas prices moved lower on Friday but remained above the breakout level. Support is seen near the 10-day moving average at 2.58. Resistance is seen near the August highs at 2.74. Short-term momentum has turned negative as RSI moved from overbought to neutral territory. Medium-term momentum is neutral but turning negative as the MACD (moving average convergence divergence) histogram prints in the black with a declining trajectory which points to consolidation.

Demand in the US Rises Driven by Electricity Generation

Total U.S. consumption of natural gas rose by 0.8% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 1.3% week over week. In the residential and commercial sectors, consumption increased by 0.8%. Industrial sector consumption decreased by 0.2% week over week. Natural gas exports to Mexico increased 8.0%.