Natural Gas Price Forecast – natural gas markets drift lower on TuesdayNatural gas markets drifted a bit lower during the trading session on Tuesday, reaching down towards the $2.80 level. That’s an area that has of course offered short-term support, and it is a round number so I would anticipate a little bit of a pushback.
Natural gas markets have dropped during the day on Tuesday, reaching down to the $2.80 level underneath. That’s a level that will offer a little bit of support, but I think that once we break down below the $2.80 level we are more than likely going to go down to the $2.70 level, possibly even the $2.60 level over the longer-term, as it has been the bottom of the overall consolidation. I believe that the market will continue to see selling pressure every time it rallies, and I think that the $2.85 level above will be the short-term “ceiling” in the market. I believe that the rallies are essentially opportunities to get short, as it makes sense due to the large amount of natural gas supply. Beyond that, if the US dollar strengthens that could also put a bit of pressure on this market.
The alternate scenario of course is that we can break above the $2.90 level, but I think if we do we will more than likely go looking towards the $2.95 level, and then possibly even the three dollars level. Expect a lot of volatility in this move, and of course I would be cautious about taking a long position, realizing that there’s more value in simply waiting for the market to rollover. That being said, I think a break towards the three dollars level is something that I would rank as having about a 10% chance right now.