Natural Gas Price Prediction – Prices Rise but Close Near the Lows

Natural gas prices gapped higher on the open but could not hold on to gains and slipped during the balance of the session. Prices closed near the lows of the day but above key support. According to the Energy Information Administration, demand increased in the latest week to the heating seasons highs.

Technical Analysis

Natural Gas prices gapped higher on the open but closed near the sessions lows just above support near the 10-day moving average at 2.55. Resistance is seen near the mid-December highs at 2.77. Additional resistance is seen near the 50-day moving average at 2.84. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). Short-term momentum is also positive as the fast stochastic generated a crossover buy signal.

Demand Rises in the Latest Week

The EIA reports that demand increased reaching a daily high for the heating season. Total U.S. consumption of natural gas rose by 0.4% compared with the previous report week. On December 16, total demand reached a daily high of 124.8 Bcf/d, the highest level for this heating season. Natural gas consumption in the residential and commercial sectors increased by 3.9%, and power generation consumption declined by 4.4% week over week. Industrial sector consumption increased by 0.9% week over week. Natural gas exports to Mexico decreased 0.1%.