Natural Gas Price Forecast January 26, 2018, Technical Analysis

The natural gas markets rallied initially during the day on Thursday, reaching towards the $3.45 level, possibly due to the weakening US dollar, and of course the colder temperatures that we have seen in the northeastern part of the United States recently. However, this is a short-lived reason to think that this market is going to go higher, mainly because we have so much in the way of oversupply, and I think it is only a matter of time before that oversupply comes back into play. Yes, we’ve been using a lot of natural gas lately, but the longer-term bias for natural gas should still be negative, as we have seen more than enough natural gas for the entire world coming out of the United States. Granted, another thing that I find interesting is that the Azerbaijani natural gas pipeline opening will probably drive down price and Europe given enough time as well.

Once we break below the $3.30 level, I’m willing to throw out a short position, and then add to it as the traders in my way. I believe that the 3.50 level will have a certain amount of psychological resistance, but the long-term attitude to this market certainly cannot be written off and given enough time I think that the volatility should turn things around. I think that you need to be very cautious though, because this market does lack of volume at times, and it can rip in your face if you aren’t watching.

NATGAS Video 26.01.18