Natural gas futures may rise as high as $4.45 per million British thermal units next week after touching an 11-month low, according to a technical analysis of the relative-strength index by Jay Levine, president of energy brokerage Enerjay LLC.
The index for gas futures fell below 26 yesterday, the lowest level since March 29. Readings below 30 suggest prices will increase, while figures above 70 can be sell signals.
“Historically speaking when RSI falls under 30, that signals an oversold condition,” said Levine, who is based in Portland, Maine. “There is a rubber-band bounce coming and I’ll be looking for anything between $4.25 to $4.45 next week.”
Natural gas for September delivery fell 5.4 cents, or 1.4 percent, to $3.817 per million Btu, the lowest settlement price since Sept. 28. The futures have declined 32 percent this year.
Before this week, the index was last below 30 on March 31, a day before prices began a 36 percent rally from $3.81 to $5.196 on June 16.