Natural Gas Markets Continue Plunging

Natural gas markets have plunged during the trading session again on Wednesday as we continue to see plenty of bearish pressure in a market that had been falling apart to begin with. The fact that we are trying to close towards the bottom of the range is also a very negative sign, and therefore think it is probably only a matter of time before we would see some type of continuation. I still believe that natural gas goes looking towards the $3.50 level over the longer term, but it probably takes a while to get there.

NATGAS Video 10.02.22

Rallies at this point still have to worry about the gap above at the $4.50 level, and therefore I think we probably have somewhat limited upside, and short-term bounces will continue to be thought of as opportunities to short yet again as temperatures warm up in the USA. The contract that we are currently trading is the March contract, thereby trying to price in what happens in spring.

I have no interest in buying this market, because quite frankly the demand for natural gas is going to fall off of a cliff as temperatures start to warm up again. The $3.50 level is an area that I think will be rather supportive, so keep in mind that the market may have to take a couple of attempts to break through there. If we do, that opens up the possibility of a move down to the $3.00 level, an area that has been like a magnet for price over the longer term and I think would continue to attract a lot of traders.

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