Natural Gas Price Prediction – Price Drop as Cold Weather Fails to Materialize
Natural gas prices broke down on Tuesday, as the cold weather that was expected to move into the U.S. failed to come about. While the weather is expected to be cooler than normal across the west coast over the next 6-10 days, its expected to turn warmer than normal across most of the mid-west during the next 8-14 days. The EIA estimates that natural gas consumption was down 2.5% year over year in 2020.
Technical Analysis
Natural gas prices broke down on Tuesday, declining 7%. Prices broke through and upward sloping trend line. Target support on the February contract is seen near the December lows at 2.26. Resistance is seen near the 10-day moving average at 2.70. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is poised to turn negative as the MACD is expected to create a crossover sell signal.
Consumption was Down in 2020
The EIA estimates that U.S. natural gas consumption averaged 83.1 billion cubic feet per day in 2020, down 2.5% from 2019. EIA expects that natural gas consumption will decline by 2.8% in 2021 and by 2.1% in 2022. Most of the decline in natural gas consumption is the result of less natural gas use in the power sector, which EIA forecasts to decline because of rising natural gas prices. These declines are partly offset by rising natural gas use in other sectors.
This article was originally posted on FX Empire
