Natural Gas Price Prediction – Prices Surge on Colder Weather Forecast

Natural gas prices rose 5.5% on Friday, ending the session from the day's highs. Colder-than-normal weather is expected to cover most of the US Midwest for the next 8 to 14 days, which is likely to fuel demand for natural gas. Hurricane Delta is still active in the Gulf of Mexico and disrupted nearly 20% of natural gas production. The number of oil and gas rigs, a leading indicator of future production, rose three to 269 in the week ended October 8th. The number of natural gas rigs decreased by 1 while the number of oil rigs increased by 4. The EIA forecasts natural gas production in 2020 to be down.
Technical analysis
Natural gas prices rose sharply on Friday, falling near a downward trendline near 2.87 before resistance. Prices reached resistance near the 50-day moving average, which is now near 2.74. The medium-term dynamic has developed positively as the MACD index (Moving Average Convergence Divergence) generated a crossover buy signal. This occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses the MACD signal line (the 9-day moving average of the MACD line). The RSI also shot higher, reflecting accelerated positive momentum.
EIA predicts lower production for 2020
EIA predicts US dry natural gas production will average 90.6 Bcf / d in 2020, compared to 93.1 Bcf / d in 2019. Natural gas production declines most in the Perm region, where the EIA expects that low crude oil prices will lower the associated natural gas prices. The EIA forecast for dry natural gas production in the US averages 86.8 Bcf / d in 2021 compared to 2020.
This article was originally published on FX Empire
More from FXEMPIRE:
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Weekly price forecast for GBP / USD - continues to wrestle with the same level
Natural gas price forecast - prices rise due to colder weather forecast
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Silver Weekly Price Forecast - Silver Form Bullish Candlestick
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