Natural Gas Price Forecast – natural gas markets fall to close out the week

Natural gas markets continue to be very choppy, but Friday was in fact a very bearish turn of events. Perhaps it is concerned of a warmer than typical winter in the United States, or perhaps it is the inventory numbers that are somewhat bearish, but it seems as if the natural gas markets are trying to reenter the previous consolidation area, and at this point I think if we break down below the bottom of the candle stick for Friday, we will probably test the $3.10 level, and then eventually the $3.00 level. At this point, below there could break down to the $2.80 level, which is the bottom of the overall longer-term consolidation.

At this point, if we do break out to the upside, then the market probably could reach to the $3.40 level. However, I see a lot of noise just above so I think at this point it’s likely that we will see sellers on the short-term rallies. If the “El Niño” hits the United States this winter, that will drive down demand for natural gas in a big way, perhaps wiping out the seasonality of natural gas markets. If that happens, then there’s no reason to think that we won’t reenter the previous consolidation, which of course is what we have seen for so long. Ultimately, this is a market that I think continues to be fixated on the oversupply of natural gas in the United States, so therefore I think longer term we are going to have a hard time breaking above the $3.40 level anyway.

NATGAS Video 29.10.18