Natural Gas Price Prediction – Prices Move Lower but Close Off Session Lows
Natural Gas prices moved lower on Friday, after testing resistance levels. The natural gas rig count increased in the latest week. The weather is expected to be warmer than normal throughout most of the United States which should reduce heating demand. There is a tropical depression (number 25) that is entering the Gulf of Mexico and could reduce natural gas production. There is one additional disturbance which has a 10% chance of becoming a tropical cyclone in the next 48-hours according to NOAA.
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Technical Analysis
Natural gas prices moved lower testing trend line resistance on Friday but was unable to recapture the 2.56 level. Support is seen near the October lows at 2.37. The 10-day moving average has crossed below the 50-day moving average, which means that a medium-term downtrend is now in place. Momentum is negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.
Demand Increased in the Latest Week
Demand rises slightly with gains in the power sector. Total U.S. consumption of natural gas rose by 0.4% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation climbed by 3.8% week over week. In the residential and commercial sectors, consumption declined by 7.5% amid seasonal fall temperatures. Industrial sector consumption decreased by 0.5% week over week.