Natural Gas Price Forecast – Natural Gas Markets Continue to Struggle With Rallies

Natural gas markets have rallied a bit during the course of the trading session, but also have given back quite a bit of the gains. Because of this, the market looks as if it is going to struggle to hang onto any gains this time of year, which typically is not an issue, but we do have milder temperatures in the United States. Because of this, it is difficult to imagine that natural gas is going to rally for significant gains at this point. We are already pretty deep into the January contract, and it is likely that with warmer temperatures coming shortly thereafter, natural gas may be a bit of a bust this year.

NATGAS Video 17.12.21

I know a lot of my European and Asian friends have a hard time believing this, but this market simply cannot gain. One of the biggest reasons of course is that we have seen a lot of supply come into the market, while temperatures in the United States have not fallen drastically. As long as that is going to be the case, natural gas will not pick up. Remember, this is a uniquely American contract, and it has nothing to do with the rest of the world.

Because of this, it is very likely that any time we approached the 200 day EMA above, there will probably be sellers willing to jump in and punish the market. All things been equal, this market is more than likely going to go looking towards the $3.00 level over the longer term based upon the “measured move” of the descending triangle above. I have no interest in buying natural gas.

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