Natural Gas Price Forecast – Natural Gas Markets Continue To Rally

Natural gas markets have rallied a bit during the trading session after initially falling on Wednesday in what is be very impressive move. We have seen a nice move above the 50 day EMA after initially dipping below it, but we should pay attention to the fact that we are just below the $2.00 level. Furthermore, the natural gas inventory figures come out during the day on Thursday and that of course will be a market moving event in and of itself.

NATGAS Video 12.03.20

Looking at the chart, it isn’t much to get excited about quite yet, but it certainly is pressing a significant resistance barrier. There is probably more likely to see selling than bombing, because quite frankly the market has gotten a bit ahead of itself. This looks more or less to be a “short covering rally” than anything else, because quite frankly this is not the time of year to see overall structural strength as demand will start to draw. That being said, we are extraordinarily oversold from a historical standpoint so it’s not a huge surprise to see an opportunity for the bounce that we have had.

The question now is whether or not there is enough real demand out there to support this rally for much longer. The $2.20 level is crucial for me as well, so I will be watching that level to see whether or not it offers resistance if we do break out to the upside. Even though we have seen a very strong move, I’m not very keen to start buying anytime soon.