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Natural Gas Price Forecast – Natural Gas Markets Continue to Drift Lower

By:
Christopher Lewis
Published: Mar 17, 2023, 15:38 GMT+00:00

Natural gas markets have struggled again during the day on Friday, as we continue to drift lower. Natural gas has far too much in the way of headwinds to be a buyer at this point.

Natural Gas, FX Empire

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Natural Gas Price Forecast Video for 20.03.23

Natural Gas Technical Analysis

Natural gas markets have drifted a bit lower during the trading session on Friday, as we continue to see further downward momentum. After all, we are heading into the springtime for the Northern Hemisphere, and therefore it’s likely that demand will continue to drop as heating will no longer be a major driver. This is typically a negative time of year for the natural gas markets, and therefore you have to look at it through that prism.

Underneath, the $2.00 level should offer a certain amount of support, so look at that as a potential floor in the market for the short term, but I would not necessarily count on that as being overly supportive. After all, the natural gas market seems toxic at the moment, not only due to the warmer temperatures coming, but there’s also concerns now that the global economy may slow down. If that is going to be the case, then it’s very likely that the price of natural gas will drop as industrial usage will fall off of a cliff.

Rallies at this point will almost certainly find quite a bit of resistance. The $3.00 level is obviously a large, round, psychologically significant figure, and will attract a certain amount of options barriers and traders in general, and therefore I do think that any rally towards that area will more likely than not face quite a bit of selling pressure. On any rally and signs of exhaustion, I am more than willing to start shorting this market as there’s really nothing out there to make it go higher.

Adding even more fuel to the fire is the fact that Freeport is operating at full steam to supply the European Union with liquefied natural gas, and we had also seen that the winter in the European Union had not been overly cold, and Europeans were able to get through the winter without draining their natural gas reserves. However, this may be a longer-term structural problem so later this year I might start looking for a big rally. At this point, I think we are trying to find some type of range, perhaps between the $2.00 level in the $3.00 level.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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