Natural Gas Price Prediction – Prices Whipsaw and Drop as Momentum Remains Negative

Natural gas prices whipsawed initially moving higher but then reversing into the close of the trading session. The weather is expected to remain much warmer than normal throughout most of the mid-west for the next two weeks, and as the pattern moves west to east, the warm weather is expected to head toward the east coast. It appears that the slow drop in natural gas active rigs is making a dent in the volume of natural gas that is currently produced.

Technical Analysis

Natural gas prices made a higher high and then close near the lows, slicing through short term support, which is now resistance near the 10-day moving average at 1.90. Additional support is seen near the July contract lows at 1.84.

Short term momentum has turned negative after turning positive on Tuesday. The flip flop crossover signals generated by the fast stochastic is a sign of consolidation. Medium-term momentum is still negative but it’s decelerating. The MACD (moving average convergence divergence) histogram is printing in the red with a flattening trajectory which points to consolidation.

Natural Gas Production Slows

The supply of natural gas dropped as natural gas production falls, according to data from the EIA. The average total supply of natural gas fell by 1.9% compared with the previous report week. Dry natural gas production decreased by 2.1% compared with the previous report week. The average net imports from Canada increased by 1.0% from last week. The drop in natural gas rigs across the US is now putting a dent in supply.

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