Natural Gas Price Prediction – Prices Slip Closing the Week in the Red

Natural gas prices moved lower on Friday making a lower high and a lower low. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal for most of the East Coast and Mid-Atlantic for the next 6-10 and 8-14 days. This warmer than normal weather would increase cooling demand.

Technical Analysis

Natural gas prices moved lower on Friday and closed below resistance near the 10-day moving average which is now seen as resistance at 2.97. Additional resistance on the June contract is seen near the May highs at 3.15. Momentum is negative as the fast stochastic generated a crossover sell signal and moved from overbought levels to the middle of the neutral range. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

Demand Declines On Lower Heating Consumption

Demand declines on lower heating consumption in the residential and commercial sector and reduced export volumes. Total U.S. natural gas demand fell by 10.8% compared with the previous report week, according to the EIA. Natural gas consumed for power generation climbed by 1.9% week over week. Industrial sector consumption decreased by 3.0% week over week. In the residential and commercial sectors, consumption declined by 39.7% as comfortable temperatures for most of the country lowered heating demand.