Natural Gas Price Prediction – Prices Whipsaw as ETA Enters the Gulf

Natural gas prices whipsawed but closed the session unchanged as concern over Hurricane ETA was offset by warmer than normal forecasted temperatures. Supply rose in the latest week putting downward pressure on natural gas prices. Hedge funds added to short-positions and reduced long positions in futures and options according to the latest commitment of traders report.

Technical Analysis

Natural gas prices whipsawed on Monday, closing nearly unchanged after making a lower low and a lower high. Target support is seen near the July lows at 2.65. Resistance is seen near the 10-day moving average at 3.13. The 10-day moving average has crossed below the 50-day moving average which means that a short-term downtrend is now in place. Prices are nearly oversold as the RSI (relative strength index) is printing a reading of 32, just above the oversold trigger level of 30 which could foreshadow a correction. Momentum is negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.

Supply Rises on Higher production

The EIA reported that the average total supply of natural gas rose by 1.9% compared with the previous report week. Dry natural gas production grew by 1.5% compared with the previous report week. The average net imports from Canada increased by 8.0% from last week.