Natural Gas Price Prediction – Prices Surge on Cold and Warm Temperatures

Cooling and heating demand lift prices
David Becker
Natural gas daily chart, May 20, 2019

Natural gas prices rose on Monday as a combination of weather factors helped lift the prompt contract. According to the National Oceanic Atmospheric Administration, the weather is expected to remain colder than normal in the west and mid-west for the next 2-week and brutally hot in the southeast and the east coast. This should increase heating demand in the west and drive cooling demand in the east. In some places in the planes temperatures were below 40F in the AM on Monday. With exports of LNG increasing last week, demand from overseas for US natural gas could be rebounding.

Technical Analysis

Natural gas prices surged higher on Monday rising 1.86%, and closing above resistance which was former support near an upward sloping trend line which is seen near 2.66. A close above this level is positive and could allow prices to consolidated must below resistance near the 10-day moving average at 2.69. Support below the 2.66 level is seen near the 10-day moving average at 2.61. Medium term momentum remains positive as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory which points to higher prices. Short term momentum is also positive as the fast stochastic recently generated a crossover buy signal. The fast stochastic is printing a reading of 88, which is well above the oversold trigger level of 80 which could foreshadow a correction.

LNG Exports Rose

US liquefied natural gas exports rose week over week, according to the EIA. Eleven LNG vessels with a combined LNG-carrying capacity of 38.0 Bcf departed the United States from May 9 to May 15, according to the EIA. Two vessels, one at Sabine Pass and one at Corpus Christi, were loading at their terminals on Wednesday. According to the EIA, the owner of the Cameron LNG facility in Hackberry, Louisiana, Train 1 has begun producing LNG and Sempra expects to load cargoes in the coming weeks.

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