Natural Gas Price Forecast – natural gas markets drift lower on Tuesday

Natural gas markets drifted a bit lower during trading on Tuesday, as we have remained somewhat range bound for the first couple days of the week. If you’ve been reading my columns, you know that I have a downward bias for this market, but I also recognize that the hurricane hitting the Gulf of Mexico will have a certain amount of influence on where price goes in the short term, which is what this market focus is on, the short term. Because of this, I think that it is probably only a matter of time before we rally, but that rally will probably be sold off rather quickly. During the day, we have seen futures jump as high as $2.875, only to be sold off again. I think this shows just how difficult it is going to be to hang onto the overall rally, and I still believe in selling longer term. That’s not to say that this will be difficult at times, but I think we will go looking towards the $2.70 level underneath for the next target.

If we were to break above the $2.875 level, then I think we could go looking towards the gap from the open, which could have us as high as $2.92. However, I would not expect a move much beyond that. This is a marketplace that continues to show signs of exhaustion on rallies, so therefore I think the best opportunities will be selling those rallies as they occur. Ultimately, natural gas is oversupplied and therefore there is going to be a weight around the neck of the market longer term.

NATGAS Video 05.09.18