Natural Gas Price Prediction – Prices Surge on Cold Weather Forecast
Natural gas prices broke out on Tuesday as colder than normal weather helped buoy prices. The fact that oil rigs will come offline due to prices falling below the breakeven level, has generated a bullish case for natural gas. While demand remains steady, supply for the first time could come offline allowing prices to rebound. Current inventories are 17% below the 5-year average while current natural gas prices are 33% lower than the current 5-year average. This would mean there is some upside to prices if inventories are able to stabilize as production declines.
Technical Analysis
Natural gas prices surged higher rising nearly 9%, as colder than normal weather spread across the United States. Prices sliced through resistance which is now seen as support near the 50-day moving average at 1.83. Target resistance is seen near a downward sloping trend line near 1.95. 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). The MACD histogram also generated a crossover buy signal, pushing through the zero index line with an upward sloping trajectory which points to higher prices.
This article was originally posted on FX Empire
