Natural Gas Price Prediction – Prices Rally and are Poised to Test Higher Levels
Natural gas prices closed at the highest levels of the year as robust heat, the recent storms and flat inventories continue to buoy prices. The flat trajectory of the builds ahead of the drawing season is a good sign for prices. The weather is expected to be warmer than normal for the next 2-weeks. The remnants of Ida left the East Coast a mess and will continue to buoy natural gas demand. Hurricane Larry is headed for Bermuda but is unlikely to interfere with any natural gas installations. Natural gas supplies declined week over week.
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Technical Analysis
Natural gas prices rallied on Friday finishing the week in the black. Strong support is seen near the 50-day moving average near 4.00. Momentum is positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average, crosses above the MACD signal line (the 9-day moving average of the MACD line.
Supplies Declined
Average U.S. natural gas supply falls week over week. According to data from the EIA, the total average natural gas supply fell by 2.3%, or 2.3 Bcf per day, compared with the previous report week. Average dry natural gas production and marketed production decreased by 2.4% and 2.6%, respectively driven by a decrease in production from the Gulf of Mexico.