Natural Gas Price Prediction – Prices Surge on Cold Weather Forecast; Short Covering

Natural gas prices surged higher on Tuesday as colder than normal weather is expected to cover most of the United States for the next 6-10- and 8-14-day forecast. The cold weather is expected to buoy heating demand substantially in the mid-west.  Hedge funds also appear to be caught offsides, which is generating a lot of short-covering.  Prices were up at much as 8% on the day. There is one tropical disturbance that is in the upper Atlantic that is not likely to make an impact on natural gas infrastructure. Natural gas exports surged during the first half of 2019, allowing the US to become a net exporter of natural gas for the first time.

Technical Analyst

Natural gas prices surged higher on Tuesday rising nearly 8%, and attempting to break out to fresh highs. The next level of target resistance is seen near the September highs at 2.71. Support on natural gas is seen near the 10-day moving average at 2.32. The short term trend is upward sloping as the 10-day moving average recently crossed above the 100-day  moving average. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occur as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Exports Rise

The Energy Information Administration reported this week that exports surged during the first half of 2019. During H1 2019 U.S. net natural gas exports averaged 4.1 billion cubic feet per day according to the EIA which was more than double the average net exports in 2018. The United States became a net natural gas export on an annual basis in 2017 for the first time in almost 60 years.