Natural Gas Price Prediction – Prices Tumble 11% on Weather Forecast

Natural gas prices tumbled 11% on Monday, and volatility collapsed as long positions continued to be liquidated. This follows a 25% decline in the price of natural gas last week. The weather in the mid-West is expected to be much warmer than normal near record highs, and the rest of the country is also expected to see warm weather conditions. There was very little change in futures and options positions as of last Tuesday, according to the most recent commitment of traders report released for the date ending 11/30/21.

Technical Analysis

Natural gas prices tumbled on Monday, dropping 11% after a 25% decline last week. The liquidation is obvious, and with weather conditions likely to create demand, prices can continue to fall. Momentum is negative as the MACD (moving average convergence divergence) histogram is printing in negative territory with a downward sloping trajectory which points to lower prices. Prices are oversold. The fast stochastic is printing a reading fo 3, well below the oversold trigger level of 20.

Consumptions Rose

U.S. natural gas consumption increases week over week in all sectors, except the power sector, and exports increase from a week ago. Total U.S. demand of natural gas increased by 0.8% compared with the previous report week, according to the EIA.