Natural Gas Price Forecast – Natural Gas Continues to Look Threatened

Natural gas markets have gapped lower to kick off the trading week, turned around to fill that gap, and then fell again. The $2.60 level continues to offer support, at least on the short-term charts. Ultimately, I do think that we break down below there, perhaps reaching towards the 200 day EMA at the $2.47 level. At this point, I think it is only a matter of time before the market rolls over due to the fact that we are already in the February contract and getting ready to turn over.

NATGAS Video 12.01.21

At this point in time, the $2.40 level could be a target, but that does not mean that we get there right away. I think every time this market rallies, you would be looking at a selling opportunity, and it appears that $2.80 is now the “ceiling in the market”, and we are drifting lower in general. Given enough time, I think that this is a market that will continue to drop lower. Ultimately, I think this commodity is going to go towards the $2.00 level. Ultimately, this is a market that I think is exiting the “busy season” for demand, and therefore I find it difficult to make a bullish case as temperatures will be rising in the northern hemisphere.

True, there will be a lot of stimulus and it could drive up some industrial demand, but quite frankly we have so much in the way of supply that any significant rally would quickly get sold into. If winter and a depreciating US dollar cannot lift this market, I really do not see what is going to happen to change the overall malaise.

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