Market Analysis: Natural Gas Prices Fall to More than 2-month Lows


Yesterday, XNG/USD quotes dropped below the 2,900 level for the first time since mid-September. This was helped by the fact that the NatGasWeather weather forecasting model late last week showed a cooling trend in December in the US, but this was replaced by warming over the weekend.

According to analyst forecasts from Analysts Tudor, Pickering, Holt & Co., published on Monday:
→ natural gas reserves at the end of winter could be 2 trillion cubic feet (previously forecast 1.9 trillion);
→ price could be USD 2.75 (previous forecast was USD 3 or less).

Meanwhile, the US Natural Gas price chart shows that:
→ the price of natural gas is near the lower border of the channel (shown in blue), which can provide support;
→ the MACD indicator indicates divergence (a sign of weakening selling pressure).

Thus, although the market has been in a bearish trend since the beginning of November (shown in red), the chart shows bullish signs — it is possible that the price in the short term may rise to the upper limit of the red channel. The likelihood of this scenario will increase if the weather forecasting model indicates a cold snap.

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