Natural Gas Price Forecast – Natural Gas Markets Fall Again

Natural gas markets fell again during the trading session on Thursday, as the inventory number came out basically as expected. This shows that there isn’t any type of increase in the demand of the natural gas commodity, as it struggles due to a serious oversupply issue, and of course the warmer than anticipated winter. That being the case, the market is very likely to continue to be sluggish and the -201 billion print during the trading session was essentially the same as expected. With this, the market is very likely to go looking towards the $1.80 level where that we should see a little bit of support, but it is in fact being threatened at this point.

NATGAS Video 31.01.20

Looking at this chart, it’s obvious that the sellers are still very much in control, in a market that seems to be struggling to find a bottom. At this point, the market is obviously very negative and cannot chew through the additional 17% of supply that was drilled last year. The fact that winter has been relatively mild in the United States has not helped the scenario, so we have a huge glut of natural gas. Ironically, the natural gas game had been so good in the United States that huge influx of new drilling companies had rushed to the market once fracking became reasonably attractive. Unfortunately, we are now at a point where there are so many companies out there producing so much natural gas, that we are going to see massive amounts of bankruptcies in the United States when it comes to this sector, driving down the output. That is what’s going to save this market, but we are a long way from seeing that turn the tide. In the meantime, look for rallies to sell near the $2.00 level, and then eventually the 50 day EMA which is closer to the $2.20 level.

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