Natural Gas Prices Drop on Warm Weather Forecast

Natural gas prices continue to move lower on a warm weather forecast. According to a report from NOAA, the weather in the U.S. is expected to warmer than normal throughout most of the United States for the next 6-10 and 8-14 days. Natural gas supplies declined last week.

U.S. natural gas supply decreases from all sources this week. The average total supply of natural gas fell this report week by 1.0% compared with the previous report week, according to data from the EIA. Dry natural gas production decreased by 1.0% and average net imports from Canada decreased by 1.9%.

Technical Analysis

Natural gas prices dropped on Tuesday declining 5.7% after rising by 12% last week. Prices sliced through support which is now resistant near the 10-day moving average at 4.66. Support is seen near the 200-day moving average at 4.34.

Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive but decelerating. The MACD (moving average convergence divergence) index is printing in positive territory with a flattening trajectory which points to consolidation.