Natural Gas Price Forecast – natural gas markets are jittery to open week

Natural gas markets fell during the trading session on Monday, reaching towards the uptrend line that I have drawn on the chart. I think we are forming a bit of a wedge, and quite frankly I think that we had gotten far too much in the way of overbought, even though we are approaching the coldest times of the year in North America, typically a high demand season. Natural gas is found almost everywhere in North America, so it’s difficult to imagine that there will ever be a significant shortage of it. Granted, we may get the occasional drawl down like we had recently, but longer-term it’s likely that the market will continue to fall at these higher levels as suppliers will be more than willing to start selling.

NATGAS Video 04.12.18

If we do break down below the uptrend line, I think it opens the door to the four dollars level, which of course has a certain amount of psychological importance built in. If we break down below there, then I think we go filling gaps, meaning $3.75, and then $3.50. I don’t have any interest in buying natural gas, and I think that it’s only a matter of time before rallies will show signs of exhaustion that we can fade. However, if we did break above the five dollars level, that would be an extraordinary sign of bullishness, and could form a bit of a “blow off top.” Overall though, I think it’s only a matter of time before we start to trade warmer contracts, which of course will drive down price as well.