Natural Gas Price Forecast – Natural Gas Markets Continue to Slide

Natural gas markets initially tried to rally during the trading session on Tuesday but gave back the gains almost immediately. At this point, the market then reached towards the $2.80 level again. This is an area that has previously been resistance, so now it should be support. That being said though, I think it is only a matter of time before we break down significantly. The 50 day EMA would be a support level, and then down to the $2.50 level or roughly the 200 day EMA in general.

NATGAS Video 10.02.21

Notice how I have pointed out the downside and did not point out the up. That is because I do not believe that this market has the ability to continue to rally for any significant amount of time, especially considering we have recently just filled a major gap. The market is going to have to deal with the idea of a serious lack of demand for natural gas going forward. Ultimately, this is a market that I think will enter that cyclical selloff soon, perhaps opening up the move down to the $2.30 level, and then eventually the $2.00 level.

All things being equal, this is a market that is going to continue to be very noisy, but I also recognize that it is very likely to be a scenario where a lot of traders will be looking at short-term rallies to start selling yet again. After all, it will only be a matter of time before the lack of demand will etch away at any type of supply shortage. Quite frankly, natural gas is a commodity that the United States and Canada have more than enough in the ground to keep the market supplied for centuries.

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