Natural Gas Price Forecast – natural gas markets continue to find support
Natural gas markets have fallen initially during trading on Monday, reaching towards the $3.15 level. That’s an area that has been supportive more than once, so if we bounce from here it would not be surprised at all to me. We are in the seasonably bullish time of year as we have seen a lot of buying on dips, so I would continue to look at this market as one that is almost impossible to short.
Keep in mind that the United States is entering the colder time of year, and that of course will drive up value. This is a short-term phenomenon, probably lasting through the beginning of January but we now have to worry about El Niño making its appearance, as the phenomenon is possibly heading towards the US. If that’s the case, and quite often will make for mild winters, which of course will drive down the demand for natural gas. From a longer-term perspective, natural gas is more than abundant in the United States, so therefore it’s very difficult to imagine natural gas exploding to the upside much further than it already has. I think the $3.35 level will continue to be massive resistance, and I think it will be very difficult to break above there.
This is a market that is very noisy, and of course short-term focused. At this point though, I do think that a bounce is probably coming and we will more than likely go towards the $3.25 level above. If we do break down below the $3.15 level, then I think the market find support again at the $3.10 level.