Natural Gas Price Prediction – Prices tumbled as weather turns cooler than normal in early June

Key Insights

• Natural gas prices fell from the $9 mark.
• The weather is expected to become cooler than normal in early June. 
• LNG exports rose this week.

On Friday, natural gas prices fell sharply by 2.70% from this week’s highs. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal during the next 6-10 days.

However, the weather is expected to become cooler than normal during the next 8-14 days throughout most of the United States. Prices decline as the weather becomes cooler and demand decreases. 

Liquid natural gas exports rose to 13.26 Bcf, the highest they have been in a week. However, according to the EIA, working natural gas stocks, which were at 1,812 Bcf, declined by 18% year-over-year and 15% under the five-year average.

Technical Analysis

On Friday, natural gas prices broke below the 10-day moving average of %8.5 before rebounding to the $8.67 mark. Support is seen near the 10-day moving average of 8.51. Resistance is seen near the $9 mark. A break above that could signal upward traction for the commodity. Short-term momentum turns negative as the fast stochastic generated a crossover sell signal.

Medium-term momentum turned positive but is headed toward convergence as the MACD had a crossover buy signal. The MACD (moving average convergence divergence) histogram prints in positive territory with a falling trajectory, meaning downside trade action.