Natural Gas Price Prediction – Prices Slip on Warm Weather Forecast

Natural gas prices moved lower on Monday edging down as warmer than normal weather is expected to cover most of the east coast during the next 2-weeks. Cooler weather is expected to abate and should reduce heating demand.  Supply increased last week and the colder than normal weather increased heating demand. There are no tropical disturbances in the Atlantic or Caribbean.

Technical Analysis

Natural gas prices edged lower and appears to be forming a topping pattern. Support is seen near the 50-day moving average at 3.03.  Resistance is seen near the 20-day moving average at 3.21. Momentum is negative. The MACD (moving average convergence divergence) index recently generated a crossover sell signal. The MACD histogram is printing in the red with a declining trajectory which points to lower prices. The fast stochastic generated a crossover sell signal which points to short term negative momentum.

Supply Increases

Supply increases as production grows. According to data from the EIA, the average total supply of natural gas rose by 1% compared with the previous report week. Dry natural gas production grew by 1%  per day.

 

Demand increases with cooler weather

Total U.S. consumption of natural gas rose by 1% compared with the previous report week, according to data from the EIA. In the residential and commercial sectors, consumption increased by 10% as the country continues to shift from space cooling to space heating. Natural gas consumed for power generation declined by 6% week over week. Industrial sector consumption increased by 2% week over week. Natural gas exports to Mexico increased 6% this report week.

 

U.S. liquefied natural gas (LNG) exports increase week over week. Six LNG vessels with a combined LNG-carrying capacity of 22 Bcf departed the United States from October 18 to October 24. No LNG exports have left the Cove Point liquefaction terminal since the facility completed scheduled maintenance in mid-October; however, an LNG vessel has been moored outside of the terminal waiting to load a cargo since last week.