Natural Gas Price Forecast – Natural Gas Continues to Flounder

Natural Gas Technical Analysis

The natural gas market has bounced slightly during the trading session on Thursday, but quite frankly, I don’t know that I would make a big deal about this. After all, this is a market that I think continues to see a lot of support underneath, but there’s no demand, that’s the problem.

We have a massive amount of oversupply in natural gas at the market. And of course, this is the time of year when you start to lose value. That being said, when you zoom way out, you can see this, even on the weekly chart. This is an area that gets really interesting to me from an investment standpoint. So I’m probably going to continue to add to a UNG position, that’s an ETF in the US, and just hang on to it.

Yeah, I’m going to have to sit on it for a while and it may or may not pay me for months. But it certainly looks like it will pay because eventually natural gas becomes so cheap that they’re losing money. And we’re about at that point right now where drillers are starting to lose money. They won’t do that for very long and it will take some supply up the market. I’ll be watching this very closely. I won’t get levered, though, because this is a position I could be sitting on for four months. I just don’t know.

It’ll be a small part of my portfolio, maybe 7% tops. And I’ll just leave it at that. But I do expect if we can break above the $2 level, we could see a little bit of FOMO enter the market. Keep in mind that there could be a winter storm between now and then, because of that, probably dump some of that off, let it fall back to me, and buy again. This is an ideal place, historically speaking. So I can’t think of a better setup. You just have to be extraordinarily patient.

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