Natural Gas Price Forecast – natural gas markets gap higher to start weekNatural gas markets gapped higher to kick off the week, reaching above the $3.20 level. That’s an area that has been important more than once, but this is a very bullish looking set up.
Natural gas markets gap higher to kick off the week, and then pulled back to find buyers again. Now we are reaching towards the $3.25 level, an area that is extreme short-term resistance. If we can break above there, the market probably goes looking towards the $3.35 level, and I think at this point it’s obvious that the buyers run the show. However, we are a bit overextended at the moment, and I think that the prudent way to trade this market is the pullback and find value occasionally. At that point, I’m willing to buy on signs of support, and it looks as if the $3.15 level is starting to act as support as well. Longer-term, I think that we are simply in the seasonally strong part of the year anyway, so I believe that buying is probably the easiest thing to do.
If we were to break down below the $3.10 level, we could go down to the $3.00 level which of course is massive psychologically supportive. Overall, this is a market that will probably be bullish for the next two months, especially if temperatures in the United States continue to drop as they should. Remember, this market is very sensitive to the weekly inventory figure, and of course weather reports coming out of the northeastern part of the United States. Beyond that, the question is starting to come out as to whether or not we are going to have industrial demand, which could weigh upon pricing as well. After all, the economy in the US is rather strong, but there are cracks appearing occasionally.