Natural Gas Markets Continue to Get Boost From Storms

Natural gas markets have exploded to the upside yet again, as it looks like we are in fact going to go to that $5.50 level that I mentioned yesterday. That being said, this is about a short-term storm in the United States, and we are in the March contract right now. It is because of this that I am more than willing to fade rallies at this point in time, because we will see a massive drop in demand. Yes, it might be a bit painful to be bearish at the moment, but longer-term we could see a $2.00 drop rather easily. In other words, there is more money to the downside to be made on the move and most certainly longer term.

NATGAS Video 03.02.22

It is because of this that we need to be cautious about jumping “all in” right away, and quite frankly I think at this point in time we will have plenty of time to build a bigger position. I believe that we are on the precipice of a rather big flush lower, because quite frankly these storms that we have seen hit the northeastern part of the United States are a temporary phenomenon, and not a longer-term situation. The longer term situation is of course that natural gas is oversupplied is in the United States, and of course temperatures rising will drive down demand drastically. Furthermore, there could be a bit of trouble when it comes to the US dollar strengthening, and thereby it could drive down the cost as it will take less of those dollars to buy Nat Gas.

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