Natural Gas Prices Edge Higher as Cold Weather Sets in

On Monday, natural gas prices continued to rise, edging slightly higher. The activity was very light and only in the electronic market due to the observance of the Martin Luther King holiday. According to a recent National Oceanic Atmospheric Administration report, much colder than normal weather is expected to cover most of the Mid-West and North East, and warmer than average weather will cover most of the West Coast for the next 8-14 days.

Technical Analysis

On Monday, natural gas prices rallied, 0.6%. Support is seen near the 10-day moving average at 4.13. Resistance is seen near the 50-day moving average at 4.3. The 10-day moving average crossed above the 200-day moving average which means that a short-term up trend is now in place. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

The EIA Believes Prices will Remain Near $4

The Energy Information Administration reported in its January Short-Term Energy Outlook that the natural gas spot price at the U.S. benchmark Henry Hub will average $3.79 per million British thermal units in 2022, slightly less than its 2021 average of $3.91. Natural gas prices increased between March and early October 2021, but they declined in the last three months.