Natural Gas Price Forecast January 31, 2018, Technical Analysis

Natural gas markets continue to be very volatile, reaching towards the $3.50 level during the trading session on Tuesday. That was an area that has offered too much in the way of resistance more than once and was the top of the overall range for the bullish season last year. I think we are getting towards the top of the range, but I am a bit cautious about going into the market with too much money right now, because we are in a very dangerous area. If we were to break above the $3.50 level significantly, that would put us in the somewhat uncertain territory.

In the meantime, you can short this market in the CFD markets with small amounts, as I think it’s likely that we will see a return to the $3.30 level. That’s an area that will cause support, but I think in the long term, we probably go as low as $3, and then by the time the season is over with, this market will collapse back towards the $2.75 handle. We are getting close to the end of the very coldest part of the year in the United States, which typically leads to selling. Beyond that, we have a massive amount of oversupply which is going to be a longer-term issue for this market, and something that doesn’t seem to be anywhere near being reconciled. In fact, the United States has over 300 years’ worth of natural gas by itself, and that’s just from the natural gas they know about.

NATGAS Video 31.01.18