Natural Gas Price Prediction – Prices Whipsaw But Hold Support

David Becker
Natural Gas
Natural Gas

Natural gas prices moved higher after testing lower levels, as prices appear to be holding support. Warmer than normal weather is forecast to cover most of the United States over the next 2-weeks according to the latest forecast from NOAA. Warmer than normal weather will essentially reduce heating demand and weigh on natural gas prices.

Technical Analysis of Natural Gas

Natural gas prices rebounded at support near the September 2018 lows at 2.96.  This also coincided with the December 2017 lows. Resistance on natural gas prices is seen near the 10-day moving average at 3.43. Short-term momentum is turning positive as the fast stochastic generated a crossover buy signal in  oversold territory. The current reading on the fast stochastic is 4, well below the oversold trigger level of 20 and could foreshadow a correction. Momentum as reflected by the MACD (moving average convergence divergence) histogram is negative as the histogram prints in the red with a downward sloping trajectory which points to lower prices.

Supply of Natural Gas Continues to Ease

According to the IEA supply fell in the latest week by 1% compared with the previous report week. Dry natural gas production remained constant week over week. Average net imports from Canada decreased by 3% from last week.

Demand Falls on Warmer than Normal Weather

The EIA also reports that demand is declining driven by a drop in residential and commercial consumption. Total U.S. consumption of natural gas fell by 16% compared with the previous report week. The largest decrease in consumption came in the residential and commercial sectors, where natural gas use declined by 25% with warmer-than-normal weather across the Lower 48 states. Natural gas consumed for power generation declined by 11% week over week. Industrial sector consumption decreased by 3% week over week. Natural gas exports to Mexico decreased 2%. Declining demand during the withdrawal season is putting downward pressure on prices.

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