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Natural Gas Price Prediction – Prices Slip, but Hold Support Despite Warmer Weather Forecast

David Becker
·1 min read

Natural Gas prices continued to slide on Tuesday but were able to find support. Demand should come under pressure as the weather is expected to be warmer than normal for most of the United States for the next 2-weeks. Hurricane Iota was downgraded to a tropical storm after hitting Nicaragua and is not expected to hit any US natural gas infrastructure. Demand fell, driven by lower building consumption.

Technical Analysis

Natural gas prices fell on Tuesday but found support near the June lows at 2.64. Resistance is seen near a downward sloping trend line that was prior support near 2.83. The RSI has moved lower but stabilized after pushing through the oversold trigger level of 30. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices.

Demand Declines

Demand falls, driven by lower building consumption, setting new November daily low. Total U.S. consumption of natural gas fell by 14.6% compared with the previous report week, according to data from the EIA. Natural gas consumed for power generation declined by 4.9% week over week. In the residential and commercial sectors, consumption declined by 34.6%, reaching a low of 12.5 Bcf on Saturday, the lowest November level since at least 2006. Industrial sector consumption decreased by 3.7% week over week.

This article was originally posted on FX Empire

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