Natural Gas Price Prediction – Prices Consolidate Below Resistance

Natural Gas prices were nearly unchanged on Tuesday, despite making a fresh low for the January 2021 futures contract. According to a report from NOAA, the weather will be warmer than usual for almost all of the United States for the next 6-10 and 8-14 days.  There are no disturbances in the Atlantic or Caribbaean that are expected to become tropical cyclones over the next 48-hours. The volume of natural gas that was flared into the air hit a record in 2019.

Technical analysis

Natural gas prices made a new low for the January 2021 futures contract and closed below horizontal trend line resistance. Support is seen near the September continuation contract lows at 1.80. Prices are oversold. The RSI (relative strength index) is printing a reading of 27 below the oversold trigger level of 30 which could foreshadow a correction. The fast stochastic is printing a reading of 7, below the oversold trigger level of 20 which also reflects the correction’s potential. Momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.

Flaring Surged in 2019

The U.S. Energy Information Administration’s reports that the volume of U.S. natural gas that was vented and flared in 2019 was 1.48 billion cubic feet per day a record high annual average. The percentage of U.S. natural gas that was vented and flared in 2019 increased to 1.3% of gross withdrawals, the highest share recorded in EIA data.