FXEMPIRE
All

Natural Gas Price Prediction – Prices Tumble as Hedge funds Press Their Advantage

The weather is forecast to remain warm
David Becker

Natural gas prices were walloped on Friday, declining 7.5% and a contract low for the January 2020 futures contract. Prices tumbled as warmer than expected weather is forecast to move its way up from the Gulf and keep the weather warmer than normal for the next 6-10 and 8-14 days. Hedge funds likely continued to add to short positions, but there was little resistance this week as prices fell by 13%.

Technical analysis

Natural gas prices tumbled on Friday, declining by more than 7.5%, and closing down 13.2% for the week. Prices were under pressure as trader’s see little impetus to drive up demand. Hedge funds remain short and continue to pressure prices. Support is easier to see on a weekly chart as prices appear to have touched trend line support near 2.27. Resistance on natural gas prices is seen near former support at 2.48. Medium term momentum is negative as the MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices. Prices are oversold on both a dialing and weekly basis. The weekly fast stochastic is printing a reading of 20, which is just at the oversold trigger level and could foreshadow a correction.

Demand Moves Lower

Demand moved lower across all sectors, according to the Energy Information Administration led by declines in power burn. Total US  consumption of natural gas fell by 5% compared with the previous report week, according to the EIA. Natural gas consumed for power generation declined by 7% week over week. Industrial sector consumption decreased by 1% week over week. In the residential and commercial sectors, consumption declined by 5%. Natural gas exports to Mexico were the same as last week, averaging 5.3 Bcf per day.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US