Natural Gas Prices Slide Despite Colder Weather Forecast

Natural gas prices moved lower on Monday. The weather is now expected to be colder than normal throughout most of the West Coast for the next 8-14 days with cold weather moving West to East. High LNG shipments will continue indefinitely as there is likely to be a change in the way Europe receives gas, increasing its reliance on the United States.

According to the EIA, U.S. total consumption of natural gas falls slightly this week. Total consumption of natural gas in the United States fell by 1.6% to 90.5 Bcf/d compared with the previous report week. Consumption in the residential and commercial sectors declined the most, decreasing 4.6%

Technical Analysis

Natural gas prices moved lower on Monday. Support near the 10-day moving average at 4.48. Resistance is seen near the February highs at 4.86. Prices look like they are forming a small head and shoulder pattern. A break of this pattern would lead to a test of support near the 200-day moving average at 42.9.

Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is above to turn negative. The MACD (moving average convergence divergence) index is poised to generate a crossover sell signal. The MACD histogram is printing in positive territory with a declining trajectory that reflects consolidation.