Natural Gas Price Prediction – Prices Slide on Warmer Weather Forecast

Natural gas futures prices moved lower on Monday as the national weather points to warmer than normal temperatures in most of the east coast and cooler than normal on the west coast. In the wake of record-low temperatures affecting most of the country, dry natural gas production in the United States fell by 21.0 billion cubic feet per day, as rigs were unable to function. It might take 1-2 weeks before rigs are able to get back up and running give the current situation in Texas.

Technical Analysis

Natural gas prices moved lower on Monday declining 4% but holding just above support near an upward sloping trend line that comes in near 2.93. Resistance is seen near the 10-day moving average at 2.98. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The RSI (relative strength index) was overbought and has moved into the neutral range which reflects accelerating negative momentum. Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in positive territory with a sliding trajectory which points to consolidation.

While Cash Prices Rise Futures Slide

In the wake of record-low temperatures affecting most of the country, dry natural gas production in the United States fell by 21.0 billion cubic feet per day declining from 90.7 Bcf per day on February 8 to about 69.7 per day on February 17, according to the EIA. The decline in natural gas production is primarily because of freeze-offs, which occur when water and other liquids found in produced raw natural gas freeze at the wellhead and/or potentially in natural gas gathering lines near production activities, resulting in flow blockage.