Natural Gas Price Prediction – Prices Ease as UK Gas Prices Drop
Natural gas prices whipsawed and moved lower. Prices were nearly unchanged on the week. During the week the market needed to absorb a larger than expected increase in natural gas inventories. Prices in Europe also hit fresh all-time highs which initially helped buoy the natural gas contract at Henry Hub. The weather is expected to be warmer than normal on the East Coast for the next two weeks but cooler than normal on the West Coast. There is no real tropical activity in the Atlantic. Natural gas consumption rose week over a week according to the EIA.
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Technical Analysis
Natural gas prices made a higher high and a higher low but settled in the red. Prices pushed through short-term support at the 10-day moving average which is now resistance near 5.75. Support is an upward sloping trend line that comes in near 5.13. Below that is the 50-day moving average at 4.69. 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.
Consumption Rose
U.S. natural gas consumption increases week over week on a large rise in power generation. Total U.S. consumption of natural gas rose by 3.9% compared with the previous report week, according to data from the EIA Markit. Natural gas consumed for power generation climbed by 8.3%, or 2.4 Bcf per day, as a result of warmer-than-average temperatures across the Midwest and the South.