Natural Gas Price Forecast – Natural Gas Gap to Kickoff Week

The natural gas markets have gapped higher to kick off the trading session on Monday, reaching towards the $3.00 level. This is obviously a large, round, psychologically significant figure, and therefore it will attract a lot of attention. Ultimately, I do think that this is a market that is moving on several different things at the same time, not the least of which of course is the hurricane that is currently pounding the Gulf of Mexico. All of this could come into play in order to have natural gas markets finally break out.

NATGAS Video 13.10.20

The temperature will start to drop in the United States, and that of course will drive up demand. Furthermore, if we get more stimulus is possible that people will run towards the energy sector under the guise that perhaps there will be more demand due to that as well. At this point, the gap will probably need to be filled, but it should offer support based upon typical technical analysis. That would be at roughly $2.75, so I anticipate that there should be buyers. However, if we were to turn around a break above the $3.00 level, that would obviously be a very bullish sign and we could go looking towards the $3.25 level above.

As demand picks up in the northern hemisphere, it should continue to translate into higher prices. For what it is worth, we are trading the November contract for the front month, so that means that we do a lot of buying and consumption overall. I think that continues to be very bullish for natural gas and that pullback should be buying opportunities.

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