Natural Gas Price Prediction – Prices Whipsaw and Settle on Their Lows

Natural Gas prices whipsawed and closed the session unchanged on the lows of the day. Prices attempted to surge higher, despite warmer than normal weather which his scheduled to cover most of the United States for the next 8-14 days. The EIA forecasts that natural gas consumption will decline 2% year over year in 2020.

Technical Analysis

Natural gas prices whipsawed closing unchanged but on the lows of the trading session. Prices tested the 2.70 level but were rejected and closed near support at the 10-day moving average at 2.59. Medium term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs 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).

EIA Expects Consumption to Decline

The EIA expects that total U.S. consumption of natural gas will average 83.4 billion cubic feet per day in 2020, down 2.0% from 2019. The decline in total U.S. consumption reflects warmer temperatures in 2020 compared with 2019 that lowered residential space heating demand for natural gas despite many staying home in response to the pandemic. EIA expects residential demand in 2020 to average 12.9 Bcf/d and commercial demand in 2020 to average 8.6 Bcf/d.