Natural Gas Price Forecast – natural gas markets continue to hover just above supportNatural gas markets continued to hover just above the $2.70 level during the trading session on Tuesday as we continue to see plenty of bearish pressure. Every time we rally, the southern step back in and push lower. I believe that the $2.70 level underneath will eventually give way to selling pressure.
Natural gas markets have been very negative for some time now, and on the longer-term charts you can see that we are very obviously in the midst of consolidation. I believe that the consolidation will continue to be the longer-term attitude of this market, but I also recognize that there is a major situation involving oversupply. If we can break down through the $2.76 level, then I think the market probably goes down to the even lower support level at the $2.60 level. In the meantime, it is probably best to simply wait for short-term rallies that you can sell at the first signs of exhaustion. Remember, this market tends to be very volatile and very short-term focused. Because of this, you should pay attention to the weather in the United States, as it is the largest market.
Natural gas is so oversupplied that I think the three dollars level will continue to be the absolute “ceiling” of the market going forward, and it’s not until we would break over that level for a couple of weeks that I would be comfortable holding onto a position. In the short term, I think we continue to go back and forth, but I still prefer to simply wait for selling opportunities as there is much more longer-term pressure in that direction. That being said, there will be short-term buying opportunities if you are quick and nimble enough, but quite frankly I prefer to go with the stronger pressure.