Natural Gas Price Prediction – Prices Hold Support as Rig Count Fales

Natural gas prices moved lower on Friday, despite a 2-rig drop during the current week. Prices pushed through support but rebounded to close above support levels. The weather is expected to be warmer than normal for the next 2-weeks throughout the middle of the United States. A weaker than expected Chicago PMI also weighed on natural gas prices.

Technical Analysis

Natural gas prices moved lower on Friday, initially breaking through support near an upward sloping trend line that comes in near 1.83. Resistance is seen near the 10-day moving average at 1.89. Short term support has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. The current reading on the fast stochastic is 18, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.

Rig Count Declines

Baker Hughes reported that the number of active U.S. rigs drilling for natural gas declined by 2 and oil declined by 15 to 222 this week. The oil-rig count has now fallen for 11 weeks in a row, suggesting further declines in domestic natural gas output. The total active U.S. rig count, meanwhile, also fell by 17 to 301, according to Baker Hughes.

This article was originally posted on FX Empire

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