Natural Gas Price Forecast – Natural Gas Gives Up Early Gains

Natural gas markets initially shot higher during the trading session on Tuesday, reaching towards the $2.70 level before pulling back a bit. That being said, a lot of noise is being thrown into the market due to the fact that there is a tropical storm coming into the Gulf of Mexico area, and of course there is going to be a certain amount of concern about disruption. That being said, this is the time of year where natural gas does tend to be in more demand, and if that is going to be the case then obviously it should go higher and price.

NATGAS Video 07.10.20

With that, I take a look at the $2.40 level is a nice short-term floor, and I think that pullbacks at this point will probably end up being a nice buying opportunities. If we were to break down below there, then I believe that the market starts look at the $2.20 level is the next major support barrier. Ultimately, I think that we eventually go looking towards the $2.80 level and then eventually after that the $3.00 level. I do not like shorting natural gas is time a year, simply due to the fact that there is a certain amount of cyclicality to demand structure.

Because of this, I believe in buying on the dips, but I also recognize that natural gas tends to be a very short-term focused market. It is a very difficult market at times, because quite frankly it is somewhat thin, and it is because of this that the market is likely to continue to be very noisy in general.

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