Natural Gas Price Forecast – Natural Gas Markets Continue To Look SluggishNatural gas markets did recover a little bit on Friday, but just so. Ultimately, the market is oversupplied, and quite frankly we are a long way away from being able to slice through all of that supply. Natural gas continues to be one of the worst performers that I follow.
Natural gas markets bounced a bit during the trading session on Friday, using the $1.80 level as support. The level has been important in the past, just as it has been in the last couple of days. I think at this point any rally that we get we should be looking to sell though, especially near the $2.00 level. The 50 day EMA is starting to slope lower, reaching down towards the $2.16 level. All things being equal, the market should have plenty of opportunities to be sold coming, every time we bounce offering an opportunity. Signs of exhaustion after a bounce is should be thought of as selling opportunities as we are light years away from chewing through the supply of natural gas.
Warmer temperatures in the United States continue to cause issues when it comes to this market as well, as natural gas is primarily used for heating homes and businesses. If the global economy is in fact going to slow down, then it makes quite a bit of sense that demand for natural gas will continue to be an issue. If we break down below the $1.80 level, things will get much worse and it’s likely that the natural gas markets will then try to target the $1.60 level which is a major low from 2015. At this point, you have no business trying to buy natural gas although we will eventually get enough bankruptcies and drillers to drive prices back up, but that is a process that will take months, if not a few years.