Natural Gas Price Forecast – Natural Gas Markets Fall Again

Natural Gas Price Forecast Video for 08.11.23

Natural Gas Technical Analysis

Natural gas markets fell again during the early hours on Tuesday, as we continue to see a lot of volatility in the energy markets. At this point, people are starting to think about recession, which could drive down demand for energy, but natural gas had risen roughly 40% before pulling back the way it has over the last week or so, so this is probably somewhat expected. At this point, all it’s going to take is some type of geopolitical concern, or quite frankly the weather to start getting cooler again to turn the market around.

This is the biggest problem with most retail traders and natural gas markets, it’s essentially a US-based commodity. Yes, it’s used around the world but the prices that you are trading come out of the Gulf of Mexico, and a place called Henry, Louisiana. (The actual contract is called the Henry Hub contract in the futures market.) In other words, it’s going to come down to wheather in the United States under most circumstances. It is currently still warm enough to wear T-shirts and shorts in the northeastern part of the United States, so it does drive down demand.

However, my thesis remains intact from what I can see: natural gas will be in very short supply this winter, as Europeans will be buying it up from the Americans due to the fact that Russia is not an option and we have seen a couple of pipelines destroyed. Furthermore, there are a lot of questions as to whether or not natural gas is going to be coming out of Western Africa, and the Qatari natural gas situation does help a bit, but for the most part, it’s nowhere near enough to replace Russia.

In other words, the American natural gas contracts should have a really good winter. I have been gradually nibbling on this market and adding to an unlevered position, and this latest dip is just another chance to pick up a few shares here and there in the ETF market. I’m willing to wait a couple of months to get paid, because I suspect that we could go as high as $5 sometime this winter.

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