Natural Gas Price Prediction – Prices Rally but Drop 3.8% for the Week

Natural gas prices moved higher but remain range bound, as solid production and warmer than normal weather have weighed on prices. Prices declined nearly 4% this week after surging the following week as hedge funds covered short positions. The weather is expected to remain normal over the next 6-10 and 8-14 days according to the National Oceanic Atmospheric Administration.

Technical Analysis

Natural gas prices moved higher but remain range bound. Support is seen at the November lows at 2.52. A break of this level would see a test of the October lows at 2.38. Resistance is seen near the 10-day moving average at 2.73. Short term momentum is neutral as the fast stochastic hover near the middle of the neutral range with a flat trajectory. Medium-term 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 (the 9-day moving average of the MACD line). The MACD histogram is printing in red with a declining trajectory which points to lower prices.

Natural Gas Consumption and Production Hit Records in 2018

The EIA reports that the United States set new records in natural gas production, consumption, and exports in 2018. In 2018, dry natural gas production increased by 12%, reaching a record-high average of 83.8 billion cubic feet per day according to the EAI. This increase was the largest percentage increase since 1951 and the largest volumetric increase in the history of the series, which dates back to 1930. U.S. natural gas consumption increased by 11% in 2018, driven by increased natural gas consumption in the electric power sector.