Natural Gas Price Forecast – Natural Gas Markets Continue Grind Higher

Natural gas markets continue to look extremely healthy, even though we did pull back just a bit on Thursday. This is mainly because we have a slight pullback to the 50 day EMA overall, and then have seen the market fight again. Higher temperatures in the United States certainly have been driving up demand, but so has the fact that there are starting to become quite a few bankruptcies in the sector. That is exactly what is needed in a market that is flooded with supply. Beyond that, there is also the “reflation trade” that a lot of traders are currently involved in, which is a bad that the economies opening back up around the world will continue to put more demand on commodities.

NATGAS Video 17.07.20

A lesser followed factor of course is the US dollar and the devaluing of that currency. As the US dollar purchases less, obviously commodities get a bit more expensive in those same US dollars. I do believe that we are more likely than not to see buyers on dips going forward, especially near the $1.70 level. Furthermore, I think that we are eventually going to go looking towards the 200 day EMA which is closer to the two dollars level. Obviously, we have some work to do before we get there but longer-term that is where I believe we end up. I have no interest in shorting this market, at least not right now as we have seen such a fight from the $1.50 level.

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