Natural Gas Price Forecast – Natural Gas Markets Back Early Gains to Plunge

Natural gas markets initially tried to rally during the trading session on Friday, to reach towards the $3.14 level. However, we have turned around to break down below the $3.00 level, as Texas energy companies are getting ready to flood the markets with more supply due to the freezing temperatures abating. This should continue to send the market back into the springtime trade, meaning that most people will be shorting natural gas as soon as we get enough supply back into the system. Demand will be dropping, and at that point I suspect that natural gas will go looking towards the $2.25 level or so underneath.

Looking at the candlestick, it also looks bearish anyway, so I think in general there are a lot of different things lining up to have this market drop. This is not a huge surprise, because quite frankly if it were not for the freezing storm of the last couple of weeks, crude oil markets would have continued to go lower as we are trading the April contract already. The market will more than likely continue to see a lot of noise, but I think that rallies at this point will continue to be nice selling opportunities that you should be paying attention to.

Longer-term, we could even drop all the way down to the $2.00 level, but I think that is probably something that we will see sometime in the heat of the summertime. I have no interest in buying this market and believe that the $3.40 level above will continue to be a bit of a “ceiling in the market.”