Natural Gas Price Forecast – Natural Gas Markets Gap HigherNatural gas gapped higher during the trading session on Tuesday as we have cleared the $2.80 level. By doing so, the market then started to go much higher.
Natural gas markets gapped higher to kick off the trading session on Tuesday as we continue to see a lot of volatility in this market. That being said, the market looks as if it is ready to go towards the $3.00 level, an area that of course is a large, round, psychologically significant figure, and an area that I have been contemplating as a potential selling zone. That being said, we do have very cold weather coming to the northeastern part of the United States in the short term, so this could be partially to blame for the pop and pricing. That is the catch with natural gas, it tends to be very short-term based, and can literally move on the latest weather report.
NATGAS Video 13.01.21
With all that in mind, let us not forget that we are getting very close to trading spring contracts, which of course will feature warmer temperatures and therefore less demand, at least in theory. I understand that the reflation trade is going on right now, but at the end of the day natural gas is overabundant so I think it will continue its overall attitude of selling rips, as there is simply nowhere near enough demand to take out the supply.
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The 50 day EMA underneath sits at the $2.69 level it could be somewhat influential, but at the end of the day I think that we eventually break down below there and go looking towards the 200 day EMA, if not lower once we get the faintest hint of warmer temperatures coming down the road. I have no interest in buying whatsoever.
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