Natural Gas Price Prediction – Prices Whipsaw Surging into the Close

Production remains flat
David Becker

Natural gas prices whipsawed initially moving lower and then surging into the close of the trading session to end on the highs of the day. This comes despite warmer than normal weather is expected to cover most of the United States for the next 6-10 and 8-14 days. There are no disturbances in the Atlantic or Gulf of Mexico that are expected to turn into a tropical cyclone. Supply was flat week over week as production remains constant.


Technical Analysis

Natural gas prices whipsawed and surged into the close settling at the high of the trading session. Support is seen at the 50-day moving average at 2.62. A break of this level would see a test of the October lows at 2.38. Resistance is seen near the 10-day moving average at 2.73. Short term momentum is turning negative to neutral as the fast stochastic generated a crossover sell signal. 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 red with a declining trajectory which points to lower prices.


Support Remain Unchanged

Supply is flat, according to data from the EIA, were the average total supply of natural gas remained the same as in the previous report week, averaging 99.5 Bcf per day. Dry natural gas production remained constant week over week. The average net imports from Canada increased by 3% from last week. Net injections into storage totaled 34 Bcf for the week ending November 1, compared with the five-year average net injections of 57 Bcf and last year’s net injections of 63 Bcf during the same week. Working gas stocks totaled 3,729 Bcf, which is 29 Bcf more than the five-year average and 530 Bcf more than last year at this time.

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