Natural Gas Price Prediction – Prices Tumbled on Warm Weather Forecast

David Becker
Natural Gas
Natural Gas

Natural gas prices tumbled on Monday, dropping 7% as warmer than normal weather is expected to cover most of the United States for the next 2-weeks. Warmer weather reducing heating demand, and traders are speculating that prices will decline. This comes despite lower than average inventory levels which are well below the 5-year average range.

Technical Analysis

Natural gas prices tumbled on Monday, slicing through support which was former resistance at 3.66.  The next target is an upward sloping trend line that connects the lows in September to the lows in October and comes in near 3.48. Momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices for natural gas. Natural gas is also oversold, as the fast stochastic is printing a reading of 3, well below the oversold trigger level of 20 which could foreshadow a correction.

Natural Gas Production is Flat

Supply remains unchanged as imports from Canada made up for production declines. According to data from the EIA, the average total supply of natural gas remained the same as in the previous report week, averaging 92.6 Bcf per day. Dry natural gas production decreased by 1% this report week from 88.6 Bcf per day last report week. Average net imports from Canada increased by 27%, or 1 Bcf per day from 3.7 Bcf per day, last week. Daily volumes from Enbridge’s Westcoast pipeline, which provides natural gas to northwestern United States, have risen following the explosion in October.

Demand is Rising

Total U.S. consumption of natural gas rose by 15% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 9% week over week. Industrial sector consumption increased by 4% week over week. In the residential and commercial sectors, consumption increased by 26%. Natural gas exports to Mexico increased 2%.

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