Natural Gas Price Forecast – Natural Gas Continues to Drop

Natural Gas Price Forecast Video for 22-01-2024

Natural Gas Technical Analysis

Natural gas markets fell again during the trading session on Friday as it looks like we are making a beeline down to the $2.50 level. The $2.50 level is an area that’s right in the middle of the overall consolidation area and has acted like a hard floor in the market back in the summertime of 2023. This is an area that will be more likely to be important, and there is no reason to see that change this time around. I think this will be the case going forward, and we will likely be noisy in the next few weeks.

In other words, there should be plenty of market memory in this general vicinity. Market memory, of course, is something that market participants will continue to pay attention to. Keep in mind that natural gas markets spiked recently due to the winter storm that was heading into the northeastern part of the United States, but now we are starting to price in reality. After all, now that wells are de-thawing and we’ll be pumping out natural gas again, there is an oversupply. This is a structural problem, not a temporary one.

Keep in mind that even though the winter was rather mild, the winter storm was rather brutal but the reality is that the storm will end, and we are now starting to see futures traders jump back into the market and start to think about March. March is when temperatures start to rise in the United States and therefore it is typically a problem for the natural gas markets. The $2.50 level has been a bit of a magnet for price, and I think that’s what we’re trying to get back to.

If we break down below there, we could drop to the $2.00 level underneath, which would be a massive floor in the market and a huge red flag if we were to break it. I would likely be a buyer on any bounce if we drop down to that level. The market is unlikely to reach there anytime soon, but it is something that you need to have in the back of your mind.

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