Natural Gas Price Prediction Prices Tumble Breaking Down to Fresh Lows
Natural gas prices tumbled lower on Friday breaking down and closing below trend line support. Prices dropped nearly 9% on the week, as colder than normal weather quickly faded. The EIA reports that production will exceed consumption in 2020, and put further downward pressure on prices. The weather is expected to become warmer than normal over the next 6-10 days and then to moderate but remain warmer than normal over the next 8-14 days. Demand declined in the latest week driven by contraction in the need for power.
Weekly natural gas prices broke down as the Feb contract fell nearly 9%. Prices broke through trend line support and appear to be headed for the 2016 lows near 1.61. Short term resistance is seen near the weekly breakdown level at 2.03.
Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-week moving average minus the 26-week moving average) crosses below the MACD signal line (the 9-week moving average of the MACD line).
Demand Declined in the Latest Week
Demand declined in the latest week primarily in power and buildings sectors. Total US consumption of natural gas fell by 3% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation declined by 3% week over week. Industrial sector consumption decreased by 1% week over week. In the residential and commercial sectors, consumption declined by 4%.
This article was originally posted on FX Empire
More From FXEMPIRE:
US Stock Market Overview Stocks Hit Fresh High Buoyed by Housing Starts
Natural Gas Weekly Price Forecast – Natural Gas Breaks Two Dollars
Silver Price Forecast – Silver Market Continues To Kill Time
Silver Weekly Price Forecast – Silver Markets Show Signs Of Life
Natural Gas Price Fundamental Daily Forecast – Change in Weather Model Send Prices Below $2.00