Natural Gas Price Prediction – Prices Fall on Warm Weather Forecast As Supply Recovers

Natural gas continued to move lower following Thursday smaller than expected draw in natural gas inventories. The weather is expected to be warmer on the East Coast and the Mid-West for the next 6-10 days according to the National Oceanic Atmospheric Administration. Supply continues to recover as estimated dry gas production rises to early February levels following the drop due to the outages in Texas.

Technical Analysis

Natural gas moved lower closing near the session lows but did not make a lower low. Prices broke through support near the 50-day moving average which is now seen as resistance near 2.72. Support is seen near the weekly lows at 2.68. Medium-term momentum is negative as the MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Prices are oversold. The fast stochastic is printing a reading of 3, below the oversold trigger level of 20 which could foreshadow a correction.

Supply is Recovering

Supply continues to recover as estimated dry gas production rises to early February levels. According to data from the EIA, the average total supply of natural gas rose by 6.7% compared with the previous report week. Dry natural gas production grew by 10.1% compared with the previous report week, averaging more than 90 Bcf/d for the first time since the week ending February 10.