Natural Gas Price Forecast – Natural Gas Continues to Get Pummeled

Natural gas markets sold off significantly during the trading session on Wednesday to break down below the 200 day EMA. That being said though, I think that it is only a matter of time before we bounced a little bit in order to sell off yet again. Given enough time, I think that the market will probably go looking towards the $2.40 level, possibly even lower than that. After all, as the temperatures warm up in the United States, that will drive down the price of natural gas as the demand also drops.

NATGAS Video 21.01.21

To the upside, the $2.80 level offers a significant amount of resistance and I think now offers the “ceiling in the market” that we are waiting to see. Ultimately, I think that this is a market that cannot be bought under pretty much any circumstance, due to the fact that the demand of the United States will continue to drop, not only due to warmer temperatures but the fact that the economy is going to be slowing down. Stimulus does not matter, because quite frankly it did not matter before the pandemic.

Yes, there may be a sudden surge economically, but the fact that natural gas is typically used as a heating commodity does not bode well for the upcoming several months. As long as that is the case, I think that you continue to short signs of exhaustion after small bounces. All things being equal, this is a market that I have no interest in buying, at least not until we start talking about trading winter contracts again.

For a look at all of today’s economic events, check out our economic calendar.