Natural Gas Price Forecast – Natural Gas Markets Continue Collapse

Natural gas markets have gapped lower to kick off the trading session on Monday to break down below the $4.00 level immediately. At this point, the market looks as if it is going to continue to struggle to find its footing, as temperatures in the United States continue to warm. Obviously, this has a major influence on demand for natural gas, and of course production is catching up from the pandemic and the hurricane. With all that being said, it makes quite a bit of sense that natural gas finds itself collapsing.

NATGAS Video 07.12.21

The gap may get filled, but quite frankly anywhere near the $4.15 level I will be a seller of exhaustion as gaps in futures markets do tend to get filled, and then tend to offer a significant amount of resistance or support. That being said, the market will continue to be very noisy, and nonetheless favor the downside. Furthermore, we are already trading the January contract, and therefore it is more likely than not we have seen the high for the winter.

Beyond all of that, when you look at the head and shoulders/triangle that just broke down, the measured move is $3.00. While I do not think we get there in the short term, I am also the first person to admit that I did not think we would get here as quickly as we did. At this point, I have no interest whatsoever in trying to buy natural gas, and therefore I will continue to fade rallies if and when I get an opportunity. Chasing the trade all the way down here of course it is not proper trade management.

For a look at all of today’s economic events, check out our economic calendar.