Natural Gas Price Prediction – Prices Surge on New Weather Forecast

Natural gas prices surged higher on Monday, rising 11%, as NOAA predicts La Nina conditions, which will generate a ridge trough pattern. There should be warmer than average temperatures in the Southwest and cooler than normal in the northeast and mid-West. Cool air will occasionally come down from Canada and reach as low as Texas as last year. This phenomenon knocked out the power in Texas during one of the coldest periods of the winter. Just ahead of the withdrawal season, natural gas inventories are lower than average.

Technical Analysis

Natural gas prices surged higher, rising 11%, and poised to test higher levels. Resistance is seen near the October highs at 6.69. Support is seen near the 10-day moving average at 5.58. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices have quickly moved up from oversold levels. Medium-term momentum is negative but decelerating as the MACD (moving average convergence divergence) histogram is printing in negative territory with a rising trajectory which points to consolidation.

La Nina Will Generate a Ridge Trough Pattern

The National Oceanic and Atmospheric Administration’s Climate Prediction Center released its official winter outlook and confirmed that La Niña conditions will be in place from December to February. This will likely create a ridge trough pattern which sees colder air move down the middle of the country.