Italia Markets open in 1 hr 11 mins

Natural Gas Price Prediction – Prices Rise on Colder Weather Forecast

David Becker
·1 minuto per la lettura

 

Natural gas prices moved higher on Friday, recovering Thursday’s losses following a larger than expected draw in natural gas inventories. The weather is expected to become colder than normal throughout the United States’ northern portion, potentially bringing a ridge trough pattern that would bring cold weather. Natuaral gas production is expected to fall 2% in 2021 according to the latest Short-term energy outlook from the EIA.

Technical analysis

Natural gas prices moved higher  on Friday, recovering back through the 10-day moving average near 2.71. The resistance is seen near the 50-day moving average at 2.74. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal.. Medium-term positive momentum is decelerating. The MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation.

U.S. Prodution will Decline in 2021

EIA estimates that the annual U.S. gas production for 2021 will fall 2% and average 96.2 billion cubic feet per day. However, in 2022, EIA estimates that natural gas production will rise by 2% compared with year-ending 2021 production of 98.2 Bcf per day, accompanied by rising natural gas prices. The United States set annual natural gas production records in 2018 and 2019, largely based on increased drilling in shale and tight oil formations. This increased production led to higher volumes of natural gas in storage and decreased natural gas prices. In 2020, the supply and demand contraction resulting from the COVID-19 pandemic resulted in marketed natural gas production decreasing by 2% from 2019 levels.

This article was originally posted on FX Empire

More From FXEMPIRE: