Natural Gas Price Forecast – Natural Gas Continues to Consolidate

Natural gas markets rallied initially during the trading session on Thursday but gave back the gains to dig back into the previous three hammers. As we await the stimulus package, that could have an effect on commodities in general, and of course natural gas will follow. At this point the $2.60 level looks to be rather supportive, and most certainly the 200 day EMA down to $2.45 is. This being the case, the market is likely to see buyers on dips, but one of the things that we are paying attention to is the massive amount of snow that has just fallen in the northeastern part of the United States. However, the question now is whether or not the weather will live up to the hype?

NATGAS Video 18.12.20

After all, this is a market that I think will have to deal with the 50 day EMA above at the $2.75 level, and therefore if we can break above there it is likely that the market could go towards the $3.00 level. That is a large, round, psychologically significant figure, and breaking above there would of course be a very strong sign. Nonetheless, I think that is a short-term trade more than anything else. I think longer term we will start to look at the spring contracts rather soon and that should come back into play.

Once we start paying attention to warmer contracts, then obviously you will start to see this market fall rather significantly. At this point, it is likely that we will see “one last hurrah” before we break right back down due to oversupply.

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