Natural Gas Price Prediction – Prices Tumble on Cooler Weather Forecast

No tropical cyclones are expected for the next 48-hours
David Becker
Natural Gas

Natural gas prices broke down on Monday, as there is little impetus to buoy prices. There are currently no tropical storms that are expected to form in the Atlantic over the next 48-hours according to the National Oceanic Atmospheric Administration (NOAA). In addition, NOAA is forecasting that the weather is expected to turn cooler during the next 8-14 days, likely reducing the need for cooling demand. With production rising, and demand potentially declining, prices are under pressure. Volatility is also nears its annual low. Natural gas implied volatility has eased to 34%, which is much lower than the average as well as the peak during this period when it can reach 100%. Consumption of natural gas recently hit a record, but production continues to keep up with rising demand.

Technical Analysis

Natural gas prices broke through support on Monday, slicing through the 2019 lows at 2.16 which is now seen as short term resistance. Target support is now seen near the 2016 lows at 1.90 and then 1.62. Medium term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices for natural gas. Prices are oversold. The fast stochastic is printing a reading of 5, well below the oversold trigger level of 20 which could foreshadow a correction.

US Natural Gas Consumption is Rising

The US set a new record for natural gas consumption by electric power plants of 44.5 billion cubic feet per day on Friday, July 19, according to the EIA. Since July 1, 2019, US power consumption has exceeded the previous record of 43.1 Bcf per set on July 16, 2018,on five days. July 10 and July 16–19. Much higher-than-normal temperatures, structural changes to the power sector, and low natural gas prices all contributed to increased natural gas consumption by electric generators.

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

Top Promotions

Top Brokers

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